Asian shares skid as US tech firms face more scrutiny

Young journalists club

News ID: 21028
Asia » Asia
Publish Date: 8:41 - 28 March 2018
TEHRAN, March 28 - Asian shares fell on Wednesday after Wall Street was knocked hard by concerns about tighter controls on the tech industry, denting a brief global equities recovery driven by hopes that the risk of a U.S.-China trade war was easing.

Asian shares skid as US tech firms face more scrutiny

TEHRAN,Young Journalists Club (YJC) - MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.9 percent, with tech-heavy Korean shares .KS11 falling 1.4 percent.

Japan's Nikkei .N225 fell 2.1 percent.

On Wall Street, the S&P 500 .SPX lost 1.73 percent and the Nasdaq Composite .IXIC dropped 2.93 percent, making their fourth decline in five sessions.[.N]

The information tech sector .SPLRCT was the worst hit with a fall of 3.5 percent, as investors expect tighter control on the industry following a furor over use of Facebook (FB.O) data by political consultants.

Facebook fell 4.9 percent on Tuesday, taking its losses to almost 18 percent since March 16, when the firm first acknowledged the problem. Twitter (TWTR.N) fell 12 percent while Google parent Alphabet (GOOGL.O) fell 4.5 percent.

Another weak spot was Nvidia (NVDA.O), which fell 7.8 percent after the chipmaker temporarily suspended self-driving tests across the globe after an Uber Technologies Inc UBER.UL autonomous vehicle killed a woman.

Investors rotated out of the tech sector, which had long outperformed the market on hopes of new technologies such as artificial intelligence (AI) and internet of things (IoT).


“There is a sense that there will be more regulations on Facebook or FANG and that the cost of compliance will increase,” said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

The so-called FANG, a quartet of tech stocks that include Facebook, (AMZN.O), Netflix (NFLX.O) and Alphabet, have been a darling of many investors.

Concerns about trade frictions between China and the United States also lingered, although reports of behind-the-scenes talks between Washington and Beijing spurred some optimism.

“It would be in China’s interest to pursue trade rather than taking retaliatory actions. So eventually, they are likely to avert a trade war and strike a deal that will please (U.S. President Donald) Trump and increase trade,” said Hiroshi Watanabe, economist at Sony Financial Holdings.

“The market is still nervous, and there’s feeling you never know what Trump will do. But excessive wariness is likely to gradually wane,” he added.

In the currency market, the dollar changed hands at 105.51 yen , not far from Monday's 16-1/2-month low of 104.56, as the Japanese currency was supported by the risk-averse mood.

The euro lost steam after soft euro zone economic data and comments from European Central Bank policymakers flagging low underlying inflation.

Economic sentiment in the 19-countries sharing the euro slipped for the third month in a row in March while bank lending slowed.

Source: Reuters

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