By Ese Erheriene
A decline in technology stocks continued Tuesday in Asia after the tech-heavy Nasdaq Composite slipped 1.1% Monday.
“Investors are rotating out from the valuation-rich sector in an attempt to lock in profits” as the U.S. tax overhaul grinds on, said Margaret Yang, a market analyst at CMC Markets.
Taiwan’s Taiex finished down 0.8% as index heavyweight Taiwan Semiconductor /zigman2/quotes/207385621/delayed TW:2330 +2.26% shed a further 1.9%. Its downgrade at the start of last week, along with that of fellow chip giant Samsung /zigman2/quotes/209800866/delayed KR:005930 +2.63% , set off a tech slide that has continued into this week.
Samsung was down 0.2% in Korea, though the Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.54% —which Samsung dominates— closed up 0.3% as steel stocks continued strong.
In other tech hubs, Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +2.57% fell 1.1% as Chinese internet giant Tencent /zigman2/quotes/204605823/delayed HK:700 +3.44% , the city’s biggest stock by market size, dropped a further 3.2%.
Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK +2.55% finished lower by 0.2%, but pared deeper losses. The dollar during the session climbed to session highs above ¥112.60, versus ¥112.80 when local stock trading ended a day earlier.
Still, Nintendo dropped 3.2% and Sharp /zigman2/quotes/203224600/delayed JP:6753 +0.90% fell 2.1%.
According to CLSA, it is time for investors to go for “old economy” names: “New economy” stocks have little further upside after years of gains.
Some of that was seen in China on Tuesday as the CSI 300—made up of the biggest 300 companies on the Shanghai and Shenzhen exchanges—was up 0.5%. By contrast, the benchmark in Shenzhen /zigman2/quotes/210598015/delayed CN:399106 +1.48% —home to smaller, more tech-focused companies—fell 1.9% and the startup-heavy ChiNext slid 2.2%.
Beyond tech, concern about the state of Brexit talks added to the risk-off mood in global markets.
New Zealand /zigman2/quotes/211587880/delayed NZ:NZ50GR -0.59% closed down 0.1%, while Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.46% finished off 0.2%—showing scant reaction to a meeting of Australia’s central bank. It turned out as expected, with benchmark interest rates left at a record low.
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