Asian stocks sink on tech losses as rates, inflation fears mount

Investing.com
Updated May 30, 2024 06:09
Mitrade
coverImg
Source: DepositPhotos

Investing.com-- Most Asian stocks fell on Thursday amid persistent fears of sticky inflation inviting high interest rates, with the technology sector seeing the steepest declines as investors also locked-in recent profits. 


Regional markets took a weak lead-in from Wall Street, which fell on Wednesday tracking tech losses and some weak earnings, and as fears of high interest rates remained in play before key economic readings this week.


U.S. stock index futures saw extended losses in Asian trade, with focus squarely on upcoming gross domestic product data and PCE price index data- the Federal Reserve’s preferred inflation gauge- due on Thursday and Friday, respectively. 


Tech, chipmaking stocks lead losses as AI rally cools 


Tech-heavy indexes were the worst performers in Asian trade, with Japan’s Nikkei 225, Hong Kong’s Hang Seng and South Korea’s KOSPI down between 1% and 1.5%.


An initial rally in the sector, driven by hype over artificial intelligence, now appeared to be winding down, while decreased risk appetite also saw investors lock-in recent gains in the sector. 


Major chipmaking stocks- which had the highest amount of exposure to the recent AI rally- were the biggest decliners. Japan’s   Advantest Corp.   (TYO:6857) slid 5.5% and was the worst performer on the Nikkei, while memory chip-making major   SK Hynix Inc   (KS:000660) fell 2% in South Korean trade. 


TSMC (TW:2330) (NYSE:TSM)- the world’s biggest contract chipmaker- sank 1.3% in Taiwan trade.


A key outlier in the sector was Semiconductor Manufacturing International Corp (HK:0981)- the biggest chipmaker in China. The stock jumped nearly 4% after recent data showed it had become the third-largest chipmaker in the world by foundry capacity. 


The stock is also set to benefit from more supportive measures from Beijing, after the government recently unveiled a new $45 billion fund to support local chipmaking efforts.


Chinese losses limited by promises of more policy support


Chinese stocks fell relatively less than their regional peers, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes losing about 0.2% each.


Sentiment towards the country was somewhat supported by the People’s Bank promising more measures to foster economic growth. The promises come after Beijing rolled out a string of policy and funding measures over the past month, to shore up economic growth. These measures also sparked a stellar rally in Chinese markets, although it appeared to be slowing down in recent sessions.


Focus this week is also key Chinese purchasing managers index data, which is due on Friday.


Broader Asian markets retreated as sentiment soured in anticipation of more cues on U.S. interest rates. Australia’s ASX 200 slid 0.6%, extending losses after a hotter-than-expected inflation reading on Wednesday.


Futures for India’s NSEI index pointed to a negative open, with the index set for more losses as it retreated from record highs. 

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

Do you find this article useful?
Related Articles
placeholder
Chinese stocks fall after recent rally, but Goldman Sachs remains positiveInvesting.com-- Chinese stock markets retreated from 2024 highs in recent weeks, as a stellar two-month rally- driven by optimism overt stimulus- now appeared to be easing. But Goldman Sachs (NYSE:GS)
Author  Investing.com
Investing.com-- Chinese stock markets retreated from 2024 highs in recent weeks, as a stellar two-month rally- driven by optimism overt stimulus- now appeared to be easing. But Goldman Sachs (NYSE:GS)
placeholder
Analysts are increasingly bullish on this Asian videogame stockInvesting.com-- Japanese videogaming veteran Konami Corp. (TYO:9766) saw two separate brokerages turn bullish on the stock this week, citing strong growth in the firm’s mobile sports games, as wel
Author  Investing.com
Investing.com-- Japanese videogaming veteran Konami Corp. (TYO:9766) saw two separate brokerages turn bullish on the stock this week, citing strong growth in the firm’s mobile sports games, as wel
placeholder
Lenovo to issue $2 bln bonds to Saudi wealth fund unit; shares slideInvesting.com-- Lenovo Group (HK:0992) entered an agreement with a unit of Saudi Arabia’s sovereign wealth fund to issue $2 billion worth of bonds and establish a bigger precense in the Middle East, a
Author  Investing.com
Investing.com-- Lenovo Group (HK:0992) entered an agreement with a unit of Saudi Arabia’s sovereign wealth fund to issue $2 billion worth of bonds and establish a bigger precense in the Middle East, a
placeholder
ECB Preview: Forecasts from 12 major banks, another hold, cuts around the summerThe ECB is expected to remain flat on interest rates, leaving the deposit rate at 4% and holding its main reference rate at 4.5%. T
Author  FXStreet
The ECB is expected to remain flat on interest rates, leaving the deposit rate at 4% and holding its main reference rate at 4.5%. T
placeholder
【Close Date Reminder】Closing Arrangements for Upcoming HolidaysAs Christmas and New Year's Day is coming soon, please pay attention to changes in market opening and closing times.
Author  Mitrade
As Christmas and New Year's Day is coming soon, please pay attention to changes in market opening and closing times.