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Nov. 30, 2017, 2:21 a.m. EST

Chip-stock malaise spreads to Asia, dragging down markets

Australian banks hit by judicial inquiry

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By Ese Erheriene


Bloomberg News
Samsung Electronics Co. shares have dropped 8% this week.

The week’s global decline in technology stocks continued Thursday, weighing on Asian markets.

But Japan’s benchmark staged an afternoon rally, looking to end November on a strong note. It was recently up 0.6%, reversing early weakness, as it benefited from overnight declines in the yen.

Asian chip shares fell after fresh selling in the U.S. overnight, with the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.88%   falling 1.3% during a 4.4% slump in the Philadelphia Semiconductor Index /zigman2/quotes/210598361/realtime SOX +1.49%  , its biggest drop of the year.

The tech-heavy benchmark in Taiwan   ended down 1.2% to set a near-two-month closing low, Taiwan Semiconductor /zigman2/quotes/207385621/delayed TW:2330 +2.04%  sliding 3%. In South Korea, the Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.58%  was down 0.8% amid a 3.4% decline in index heavyweight Samsung Electronics /zigman2/quotes/209800866/delayed KR:005930 -0.49%  . The two stocks have slumped 7% and 8% respectively this week.

The falls came after Morgan Stanley on Monday dropped its bullish rating on both firms amid broader concerns about the state of the industry, particularly the memory-chip segment. The investment bank said prices of those products have started to fall.

One of the region’s worst-faring chip stocks has been Hong Kong-listed Semiconductor Manufacturing /zigman2/quotes/204605823/delayed HK:700 -1.72% . It has fallen 9.5% this week and is 27% below the 12-year highs set earlier this month.

“The drastic selloff in U.S. technology shares surprised many last night,” said Jane Fu, a sales trader at CMC Markets. The so-called FAANG stocks—Facebook, Amazon, Apple, Netflix and Google—fell between 2% and 5.5%.

That bled into Hong Kong, where internet heavyweight Tencent /zigman2/quotes/204605823/delayed HK:700 -1.72%  pulled back a further 2% while component makers AAC Technologies /zigman2/quotes/201441510/delayed HK:2018 -2.35% and Sunny Optical /zigman2/quotes/206687505/delayed HK:2382 -8.05%  , whose stocks have also surged this year, fell as much as 5%.

The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.09%  as recently down 1.2% as it was also hit by weakness in insurance stocks. Ping An Insurance /zigman2/quotes/202773380/delayed CN:601318 -0.61%  and AIA   /zigman2/quotes/203565558/delayed HK:1299 +2.27%  fell 2% and 3% respectively.

Elsewhere, the launch of a judicial inquiry into Australia’s financial industry sent shares of the country’s big banks sliding early before they recovered partially. The S&P/ASX 200 finished down 0.7%.

The probe “will be costly, take a lot of time and lead to unknown outcomes given the broad scope,” noted Omkar Joshi, portfolio manager at Regal Funds Management.

Some of the big banks are also listed in New Zealand. Despite Australia’s probe and fresh uncertainty about New Zealand’s freshly installed government, the NZX-50 /zigman2/quotes/211587880/delayed NZ:NZ50GR -0.17%  closed up 0.6%, allowing the index to notch a record 11th-straight monthly gain.

Meanwhile, Chinese stocks were modestly lower in afternoon trading following their recent volatility. Investors proved unimpressed with a Chinese manufacturing reading for November that came in stronger than expected Thursday morning.

Some market participants were skeptical of the figure. “They have been a poor guide to recent trends,” contended Julian Evans-Pritchard, China economist at Capital Economics.

Elsewhere, oil prices notched steady gains in Asian trade after fresh overnight declines ahead of the meeting of the Organization of the Petroleum Exporting Countries later in the day. The Brent global benchmark  was recently up 0.5% at $62.85 a barrel.

Meanwhile, bitcoin /zigman2/quotes/31322028/realtime BTCUSD +2.96%  continued its volatile trading. It rose past $10,000 for the first time Wednesday and briefly topped $11,000, but then fell more than 10% before moving back above $10,000 in Asian trading Thursday.

Robb Stewart contributed to this article.

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KR : S. Korea: KRX
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HK : Hong Kong
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HK : Hong Kong
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HK : Hong Kong
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HK : Hong Kong Exchange
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