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Asian markets tumble on sell-off in tech, energy firms

Asian markets tumble on sell-off in tech, energy firms

HONG KONG, Dec 6: Technology and energy firms were the biggest losers as Asian markets tumbled on Wednesday, extending a retreat across Europe and New York, reports AFP. A global equity rally has hit the buffers this week as the US probe into Russia’s alleged election meddling sows uncertainty, Britain struggles to reach a Brexit deal with the European Union and traders remain cautious about Washington’s ability to push through tax cuts. A key drag for Asia on Wednesday was copper prices which sank more than four percent in London, having already lost about 10 percent over the previous week. Analysts blamed a pick-up in the dollar on hopes for US tax cuts. There are also worries about China’s crackdown on borrowing-fuelled investing. “The sentiment in China has turned less positive after the conclusion of the national party congress, as the deleveraging rhetoric has returned to the market, especially with regards to real estate speculation,” TD Securities commodity strategist Ryan McKay told Bloomberg News. “Worries of the deleveraging’s impact on real estate and construction demand saw optimism for commodity demand reduced and prices retreat.” Oil prices were hit by data showing a big rise in US inventories. Sydney-listed miner Rio Tinto shed 2.5 percent and BHP was two percent off, while energy giant Woodside Petroleum lost 0.3 percent. CNOOC, Sinopec and PetroChina dived in Hong Kong while Inpex was hammered more than three percent in Tokyo. The losses hit wider markets. Tokyo ended two percent down. “The adjustment mode is deepening lately in the Japanese stock market,” said Shunichi Otsuka, general manager in the research department at Ichiyoshi Securities in Tokyo. “It’s difficult to buy unless US equities show firmness, even as some high-tech shares are becoming cheap.” Hong Kong had lost 1.6 percent in the afternoon, leaving it about six percent off its 10-year peak touched just over a fortnight ago. Shanghai closed 0.3 percent down and Sydney was 0.4 percent lower following weaker-than-forecast economic growth data, which also dragged down the Australian dollar on expectations the country’s central bank will not raise interest rates any time soon. Seoul gave up 1.4 percent, while Taipei shed 1.6 percent and Wellington dropped 0.6 percent. Greg McKenna, chief market strategist at AxiTrader, said since the US tax cuts look set to be agreed, the fall in prices could be caused by a so-called “buying the rumour, sell the (almost) fact”, mixed with profit-taking following a healthy run-up this year. The tech sector, which has been the best performer this year, was again in the red on profit-taking and as dealers shifted to firms more likely to benefit from lower US taxes. Tencent dived 1.5 percent and AAC technologies was six percent lower, with Samsung off 2.4 percent and Sony more than three percent lower. On currency markets the pound was in trouble, with British-EU talks in limbo after the government’s coalition partner dismissed Prime Minister Theresa May’s position on the future of Northern Ireland’s border with eurozone member Ireland. May is expected in Brussels again this week to try to get an agreement that would let her move the talks on to trade. Eyes are on Washington this week, where lawmakers must agree a fresh budget by Friday to avoid a painful government shutdown, while US jobs data is also due the same day.

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