Asia report: Tech sell-off leads markets lower

Markets in Asia closed weaker on Thursday, as technology shares fell across the region, while investors also digested the latest retail sales data out of Australia.

In Japan, the Nikkei 225 was down 2.13% at 28,930.11, as the yen weakened 0.3% against the dollar to last trade at JPY 107.33.

Of the major components on the benchmark index, robotics specialist Fanuc was down 2.56% and Uniqlo owner Fast Retailing lost 5.45%.

Technology giant SoftBank Group slid 5.19%, as tech plays fell across the region, following the lead of their US peers overnight, which were weaker on the back of a further rise in bond yields.

The broader Topix index was off 1.04% by the end of trading in Tokyo, closing at 1,884.74.

On the mainland, the Shanghai Composite lost 2.05% to 3,503.49, and the smaller, technology-centric Shenzhen Composite slid 2.9% to 2,294.67.

South Korea’s Kospi was down 1.28% at 3,043.49, while the Hang Seng Index in Hong Kong tumbled 2.15% to 29,236.79.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 1.9% and SK Hynix 3.4% weaker.

Among the Chinese tech firms listed in Hong Kong, meanwhile, Alibaba was off 2.24%, Meituan lost 8.75% and Tencent was off 4.56%.

“Another big fall in the Nasdaq overnight dragged US markets lower overall as another sharp rise in US yields continued to keep investors off balance, despite a more positive outlook from the latest Fed Beige Book,” said CMC Markets chief market analyst Michael Hewson.

“One can understand why investors are concerned about valuations in the US, particularly around the tech sector which has driven a lot of the gains in the US over the past few years, against a background of rising yields.

“Later today Fed chairman Jay Powell will have the opportunity to comment further on the recent rise in yields, and while there is an argument that they are reflective of a more positive economic outlook, there is also a risk that if they rise too quickly the Fed may well have to be more forceful in its interventions, or reaction function, to keep them under control.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.3% at $63.88 per barrel, and West Texas Intermediate losing 0.54% to $60.95.

In Australia, the S&P/ASX 200 was 0.84% weaker at 6,760.70, as fresh data revealed that the country’s retail sales were up a seasonally-adjusted 0.5% month-on-month in January.

That figure from the Australian Bureau of Statistics was just shy of the 0.6% anticipated by economists polled by Reuters.

The country’s trade surplus, meanwhile, came in at AUD 10.14bn, which was well above Reuters-polled expectations for a surplus of AUD 6.5bn.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 1.09% lower at 12,224.50, with dairy producer Synlait Milk plunging 10.1% after the company pulled its guidance, saying it would not even achieve its previous annual net profit forecast for 2021 of half of 2020’s figure.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.02% stronger at AUD 1.2859, while the Kiwi weakened 0.04% to change hands at NZD 1.3806.