Asian stocks fall as US-China jitters persist; TSMC sparks little cheer

Investing.com-- Most Asian stocks fell on Friday amid persistent concerns over a renewed trade war between the U.S. and China, while positive earnings from TSMC did little to stop a rout in technology stocks.

Regional markets took negative cues from their U.S. peers, as an extended rotation out of technology stocks sparked overnight losses on Wall Street. U.S. stock benchmarks tumbled from record highs over the past three sessions. 

U.S. stock index futures rose mildly in Asian trade, as a rout on Wall Street appeared to be somewhat easing. Focus also turned to a slew of key U.S. earnings due in the coming days, with majors including Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOGL) and Tesla Inc (NASDAQ:TSLA) set to report. 

Chinese stocks down on US trade jitters; stimulus hopes dampen losses

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell slightly on Friday, although they were trading above intraday lows. 

Media reports this week suggested that the U.S. was considering stricter trade restrictions against China, especially the country’s technology and chipmaking sectors. 

The reports ramped up concerns over a renewed trade war between Beijing and Washington, given that trade relations between the two are already strained.

Speculation over a second Donald Trump presidency also dented Chinese stocks, given that Trump has maintained a largely negative rhetoric against Beijing.

Still, losses in Chinese stocks were dampened by promises of more supportive policy from the Chinese government, as the Third Plenum of the Chinese Communist Party carried on. 

Tech rout persists, TSMC offers little support to chipmakers 

Technology-heavy indexes were the worst performers in Asia, as the sector continued to grapple with profit-taking and as expectations of interest rate cuts sparked a broad pivot into economically sensitive sectors. 

Losses in tech dragged Japan’s Nikkei 225 down 0.4%, while Hong Kong’s Hang Seng index slid over 2%. 

South Korea’s KOSPI shed 1.5% on losses in chipmaking stocks.

Chipmaking stocks slid even as industry major TSMC (TW:2330) (NYSE:TSM) clocked stronger-than-expected earnings for the second quarter, and upgraded its outlook on the prospect of strong demand from artificial intelligence.

The firm’s Taipei shares fell 2%, as sentiment towards Taiwan was also rattled by comments from U.S. Republican presidential candidate Trump, who said that Taiwan should pay the U.S. for defense supplies. 

Broader Asian stocks fell as sentiment remained dour. Concerns over China saw Australia’s ASX 200 index slide 1.1%, with local stocks also seeing profit-taking after racing to record highs earlier in the week. 

Japan’s TOPIX fell 0.6%, as softer-than-expected consumer price index data raised questions over whether the Bank of Japan will hike interest rates soon.

Futures for India’s Nifty 50 index pointed to a positive open, as the index neared a record-high 25,000 points.