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Asian shares subdued as tech blues offset US tax cut hopes

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Syndicated News
Written by Syndicated News

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.

Japan’s Nikkei .N225 fell 0.4 percent, with semiconductor-related shares such as Tokyo Electron (8035.T) and Shin-etsu Chemical (4063.T) leading the losses.

On Wall Street, the benchmark S&P 500 .SPX finished lower yesterday after setting a record intraday high earlier as the technology sector .SPLRCT, which has led Wall Street’s record-setting rally this year, tumbled 1.9 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.

Oil steadied after falling more than 1 percent yesterday on profit-taking as the market eyed signs of rising U.S. production.

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

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Syndicated News

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