Asia down as Wall Street knocked by tech selloff, US dollar sags

Asia down as Wall Street knocked by tech selloff, US dollar sags

TOKYO,. Asian stock markets slipped today, extending sharp overnight losses on Wall Street as technology firms bore the brunt of worries about slackening demand, while the US dollar sagged after weak data further sapped confidence in the currency.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.3 per cent.

Australian stocks lost 0.7 per cent and tech-heavy South Korean shares dropped 0.9 per cent.

In Seoul, Samsung Electronics fell 2.1 per cent and SK Hynix Inc dropped 3 per cent, while Japan’s Tokyo Electron was down 2.5 per cent, Advantest lost 1.8 per cent and Sony Corp shed 2.8 per cent.

Japan’s Nikkei was down 1 per cent. Shares of Nissan Motor Co tumbled roughly 6 per cent after its chairman Carlos Ghosn was arrested yesterday for alleged financial misconduct and will be fired from the board this week.

US stocks came under heavy selling yesterday, with Nasdaq tumbling 3 per cent, as investors dumped Apple, internet and other technology shares. Conflicting signals between the United States and China on their trade dispute added to caution.

“The drop by US stocks will cut short any attempt by equity markets to mount a sustained bounce. Investor sentiment has been subdued by lingering weakness in US technology shares,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

Worries of a peak in corporate earnings growth amid rising borrowing costs, slowing global economic momentum and international trade tensions triggered a shakeout in stocks over the past two months, with trillions of US dollars worth of equity losses in a particularly torrid October month.

In currencies, the US dollar struggled at a near two-week low against a basket of currencies.

The greenback was hit after data released yesterday showed US home builder sentiment recorded its steepest one-month drop in over 4-1/2 years in November.

The US dollar had also been weighed down after Fed Vice Chair Richard Clarida and Dallas Fed President Robert Kaplan late last week raised concerns over a potential global slowdown.

The US currency has rallied strongly this year, buoyed by three Fed rate hikes and a robust economy, though some expect the bull run may be nearing an end.

With long-term US Treasury yields slipping to a seven-week low of 3.052 per cent in the wake of weaker stocks and US housing data, the US dollar index against a basket of six major currencies hovered near 96.120, an 11-day low plumbed yesterday.

The euro was little changed at US$1.1455 after gaining 0.35 per cent overnight.

The dollar slipped to a three-week low of 112.40 yen and last traded at 112.48.

US crude futures gained 0.3 per cent to US$57.36 (RM239.97), adding to the previous day’s gains, supported by a reported drawdown of US oil inventories, potential European Union sanctions on Iran and possible Opec production cuts. — Reuters