© Reuters.Investing.com-- Most Asian stocks fell sharply on Friday, with technology shares seeing a sharp reversal as markets turned broadly risk-averse ahead of more cues on monetary policy from the Jackson Hole Symposium.
While positive results from chipmaker Nvidia Corp (NASDAQ:) offered some support to regional tech stocks this week, they were largely offset by fears of more hawkish signals from the Federal Reserve, specifically Chair Jerome Powell, who is set to speak at the later in the day.
Investors locked-in strong profits on tech stocks, which had risen in the run-up and aftermath of the Nvidia results.
Regional stocks also took a weak lead-in from Wall Street, as amid pressure from high yields and as data showed that the jobs market remained strong, positing a hawkish outlook for interest rates.
Asian tech slides as rate fears quell AI cheer
Tech-heavy Asian bourses were among the worst performers for the day, with Hong Kong’s and South Korea’s down 1% and 0.6%, respectively.
Memory chip makers Samsung Electronics (OTC:) Co Ltd (KS:) and SK Hynix Inc (KS:), both of which saw strong gains earlier this week, sank between 1.5% and 3%, while Baidu Inc (HK:) (NASDAQ:), Alibaba Group (HK:) (NYSE:) and Tencent Holdings (HK:)- the big three tech stocks of China- fell between 0.7% and 2%.
TSMC (TW:) (NYSE:), Asia’s biggest chipmaker, slumped nearly 3%, while the index fell 1.1%.
Futures for India’s index pointed to a weak open, with heavyweight tech stocks expected to see steep losses.
While regional tech stocks had logged strong gains after Nvidia flagged more demand for AI development this year, the prospect of higher interest rates and worsening economic conditions largely offset this optimism.
Japanese stocks slump on tech rout, China jitters
Japan’s slumped nearly 2%, while the lost 0.7% amid steep losses in tech stocks, as well as concerns over worsening trade ties with China.
Chip equipment maker Advantest Corp. (TYO:) slid 10% and was by far the worst performer on the Nikkei 225. The stock reversed all of its gains made earlier in the week.
China banned the import of seafood from the country, citing concerns over radioactive contamination as Japan began releasing contaminated water from the Fukushima plant into the Pacific Ocean.
China is Japan’s top seafood export market, although marine exports make up less than 1% of Japan’s total exports.
Powell, central bank signals in focus
Asian stocks were also rattled by U.S. Treasury yields trending at multi-decade highs, as markets feared potentially hawkish signals on U.S. monetary policy from Powell later in the day.
Analysts have warned that Powell could flag an era of higher baseline interest rates, which bodes poorly for risk-driven markets as monetary conditions tighten.
This notion weighed on broader Asian markets, with Australia’s down 1%. China’s and indexes also fell 0.2% each.
Beyond Powell, central bankers from Japan and Europe are also set to speak at Jackson Hole, potentially offering up more cues on policy.
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August 25, 2023 at 09:48AM
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Asian stocks slide after short-lived tech rally, Powell awaited By Investing.com - Investing.com
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