TOKYO, Dec 5 2017 : Asian shares were subdued today as investors’ rotation out of technology shares took the toll on some of the region’s tech heavyweights although hopes of a major tax cut in the United States underpinned risk sentiment.
MSCI’s broadest index of Asia-Pacific shares outside Japan were capped by the fall in the region’s technology shares, with Samsung Electronics (005930.KS) losing 1.5 percent.
The tech index hit a five-week low and was down 4.3 percent from its record peak hit a week ago although it still remained the best performer of the year with year-to-date gains of 33 percent.
Investors switched to banks and retailers, which are seen benefitting from the expected corporate tax cuts.
The S&P 500 banks index surged 2.3 percent while battered department store shares also jumped.
“Some high-tech shares’ valuations are getting stretched. For the entire market to keep rallying, we needed a sector rotation,” said Nobuyuki Kashihara, head of research at Asset Management One.
“On the whole, the world’s shares are supported by a synchronized growth in the global economy,” he added.
The tax cut hopes supported the U.S. dollar in the currency market, particularly against the yen.
The dollar fetched 112.48 yen JPY=, after a brief foray to 113.09 yesterday, which was its highest level in more than two weeks.
The euro EUR= was steadier at $1.1866, sitting comfortably in its familiar trading range between $1.1810-1.1960, as the common currency was helped by hopes the two major German parties will form a grand coalition.
The British pound GBP=D4 stood at $1.3475, off last week’s two-month high of $1.3550, after European Commission President Jean-Claude Juncker and British Prime Minister Theresa May failed to reach an agreement on a divorce deal.
Bitcoin BTC=BTSP was traded at $11,571, hovering near its record high of $11,800 set on Sunday.
But their prices remained close to recent two-year highs thanks to last week’s decision by OPEC and other producers to extend output cuts.
U.S. West Texas Intermediate futures traded at $57.50 per barrel, little changed in early Asian trade. – Reuters