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Asia markets tumble; Japan, South Korea and Hong Kong drop more than 2% as tech stocks fall

Soegeefx AppsAsia MarketAsia markets tumble; Japan, South Korea and Hong Kong drop more than 2% as tech stocks fall

Key Points

  • Shares in Asia-Pacific declined in Monday morning trade, with Japan’s Nikkei 225 and the Kospi in South Korea both falling nearly 3% as technology stocks fell.
  • Looking out into the rest of the week, a slew of Chinese economic data including industrial production and retail sales for May is set to be out on Wednesday. The U.S. Federal Reserve is also expected to announce its interest rate decision later this week.
  • Markets in Australia are closed on Monday for a holiday.

SINGAPORE — Shares in Asia tumbled on Monday, as major markets in the region saw sharp losses of more than 2% amid a tech sell-off.

The Nikkei 225 in Japan dropped 2.8%, and shares of conglomerate SoftBank Group fell more than 4%. The Topix index was lower by 2.17%.

Hong Kong’s Hang Seng index also shed 2.46%. Tencent shares fell 2.67% while Alibaba dropped 4.5%, the Hang Seng Tech index traded 2.67% lower.

South Korea’s Kospi fell 2.75%, led by tech shares like Samsung Electronics which declined 2.19% while Kakao dipped 3.87%.

In Taiwan, the Taiex fell 2.4% and TSMC’s stock slipped 2.45%.

The implication that US inflation has not peaked; and that it seems to playing peek(peak)-a-boo; directly puts the US Fed in a bigger bind, committed to larger magnitude of rate hikes possibly for a longer period.

Lavanya Venkateswaran

Market Economist, Mizuho Bank

The Shanghai Composite in mainland China declined about 0.5%, while the Shenzhen Component was flat.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded close to 2% lower.

The losses in Asia came as U.S. Treasury yields rose in the morning of Asia trading hours. The benchmark 10-year Treasury note yield climbed to 3.195% while the yield on the 2-year Treasury surged to 3.181%.

Markets in Australia are closed on Monday for a holiday.

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Later this week, a slew of Chinese economic data including industrial production and retail sales for May will be out on Wednesday.

The U.S. Fed is also expected to announce its interest rate decision later this week. It comes after Friday’s hotter-than-expected U.S. inflation numbers for May.

“For markets, the implication that US inflation has not peaked; and that it seems to playing peek(peak)-a-boo; directly puts the US Fed in a bigger bind, committed to larger magnitude of rate hikes possibly for a longer period,” Lavanya Venkateswaran, an economist at Mizuho Bank, wrote in a Monday note.

“Importantly, it is also still not clear when it will due to numerous factors, including Ukraine-Russia tensions and China digging its heel into a ‘zero covid’ policy, which will continue to put upside pressure on food and energy prices while keeping supply chains constrained.”

TICKER COMPANY NAME PRICE CHANGE %CHANGE
.N225 Nikkei 225 Index *NIKKEI 27041.26 -783.03 -2.81
.HSI Hang Seng Index *HSI 21196.77 -609.41 -2.79
.AXJO S&P/ASX 200 *ASX 200 6932 -87.7 -1.25
.SSEC Shanghai *SHANGHAI 3248.51 -36.33 -1.11
.KS11 KOSPI Index *KOSPI 2519.98 -75.89 -2.92
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 8323.92 -276.6 -3.22

Dollar-yen approaches 135

The Japanese yen traded at 134.81 per dollar, just off the 135 level after weakening from levels below 132 against the greenback last week.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.501 after recently crossing the 104 level.

The Australian dollar was at $0.7007 after dropping from above $0.72 last week.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures down 1.84% to $119.77 per barrel. U.S. crude futures shed 1.84% to $118.44 per barrel.

Source : CNBC

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