Profit-Taking and Tech Sector Weakness Drive Down Asia-Pacific Markets

Asia-Pacific markets declined as profit-taking and tech sector weakness followed Wall Street’s tech sell-off. Regional adjustments reflect global market trends.

Asia-Pacific markets declined on Friday, reflecting Wall Street’s recent downturn as investors reassessed their positions following a tech stock sell-off. The decline across the region was prompted by profit-taking following a robust rally, signaling a pause in the momentum that had buoyed global markets.

Market Performance

In the Asian markets, the Nikkei 225 fell by 0.12%, while the broader Topix index lost 0.71%. Despite Japan’s June inflation rate holding steady at 2.8%, core inflation increased to 2.6%, falling slightly short of the 2.7% anticipated by analysts. The Bank of Japan will maintain its monetary policy in July to support economic growth. Notably, Japanese chip stocks showed resilience, with Tokyo Electron climbing 2.3%, Advantest gaining 2%, and LaserTec rising 1.34%.

Hong Kong’s Hang Seng index experienced a significant drop of 2.15%, primarily driven by declines in energy stocks. In contrast, the CSI 300 in mainland China slightly increased by 0.12%. Chinese chip stocks listed in Hong Kong, including Hua Hong Semiconductor and SMIC, recorded gains despite broader market pressures.

Profit-Taking and Tech Sector Weakness Drive Down Asia-Pacific Markets

South Korea and Taiwan’s markets also struggled, with South Korea’s Kospi falling 1.5% and the Kosdaq losing 0.21%. Taiwan’s Weighted Index dropped 1.64%’ as major chip stocks like Taiwan Semiconductor Manufacturing Company, Samsung Electronics, and Hon Hai Precision Industry extended their losses.

Australia’s S&P/ASX 200 declined 0.97%, reflecting regional trends. The U.S. markets also ended on a downbeat note, with the Dow Jones Industrial Average decreasing by 1.29%, the S&P 500 falling 0.78%, and the Nasdaq Composite losing 0.7%.

Commodities and Rates

In commodities, gold was priced at $2427.5 per ounce, marking a decline of 1.17%, while silver fell to $29.61, down 1.44%. Brent crude oil was down 0.57% to $84.63 per barrel, and WTI crude oil decreased by 0.71% to $80.99 per barrel.

Bond markets saw the US 10-year yield at 4.219%, the UK 10-year yield at 4.065%, and Germany’s 10-year yield at 2.411%.

Economic Data

Today’s economic data includes the EUR Main Refinancing Rate, which remained steady at 4.25%, aligning with expectations. In the U.S., unemployment claims reached 243K, surpassing the 229K anticipated, while the Philly Fed Manufacturing Index significantly exceeded expectations at 13.9 compared to the forecasted 2.7.

Upcoming Events

Investors will be eyeing the following data releases:

• 12:30 PM GMT: CAD Core Retail Sales m/m
• 12:30 PM GMT: CAD Retail Sales m/m

As global markets adjust, the focus remains on economic indicators and their potential impact on investor sentiment and market stability.

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