Investing.com-- Most Asian stocks fell on Thursday tracking steep overnight declines on Wall Street amid heightened concerns over the U.S. economy and government debt, with technology shares bearing a bulk of losses.
Japanese markets were also pressured by data showing local business activity shrank in May amid growing pressure from U.S. trade tariffs.
Broader Asian markets were pressured by losses in tech stocks, which reversed some of their recent gains following a rise in government bond yields. Risk appetite was also pressured by uncertainty over U.S.-China trade relations and a report that Russia was in no hurry to end the war in Ukraine.
S&P 500 Futures rose marginally in Asian trade, after the S&P 500 slid 1.6% on Wednesday.
Asia tech slides tracking Wall St; US-China chip discourse weighs
Technology-heavy indexes were the worst performers in Asia on Thursday, with South Korea’s KOSPI falling 1.2%, while Hong Kong’s Hang Seng index shed 0.5%.
Losses in tech came in tandem with a decline in their U.S. peers, as rising bond yields and some profit-taking pressured the sector.
Sentiment towards tech was also hit by China’s growing criticism of stricter U.S. controls on tech exports to Beijing and the country’s domestic chipmaking sector.
Beijing earlier this week warned the U.S. that its chip controls undermined a recent trade truce between the two countries. Nvidia (NASDAQ:NVDA) CEO Jensen Huang also on Wednesday called U.S. chip controls on China a “failure.”
Among individual movers, China’s Baidu Inc (HK:9888) (NASDAQ:BIDU) fell nearly 3% even as its first-quarter earnings beat expectations on strength in its artificial intelligence offerings. Hong Kong shares of battery giant Contemporary Amperex Technology Co Ltd (HK:3750) fell 2%, facing some profit-taking after marking a stellar debut in Hong Kong this week.
Tech was also pressured by a spike in Treasury yields, as investors fretted over high U.S. government debt levels after Moody’s downgraded the country’s sovereign rating.
Focus is on the passage of a tax cut bill that could entail higher debt levels for the world’s biggest economy.
Japanese shares fall on soft PMI
Japan’s Nikkei 225 lost 0.9%, while the TOPIX shed 0.5% after flash purchasing managers index data for May largely underwhelmed.
Japan’s Manufacturing PMI shrank for an eleventh straight month, as export orders were dented by high U.S. trade tariffs.
Growth in Japanese services PMI slowed sharply in May, bringing Japan’s composite PMI into contraction for the second time in three months.
The PMI data came just days after weak trade data for April, and further highlighted the headwinds faced by Japanese firms from higher U.S. trade tariffs.
Broader Asian markets largely retreated tracking overnight losses in their U.S. peers. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were outliers, logging small gains amid growing hopes that Beijing will unlock even more stimulus to support the economy.
Singapore’s Straits Times index fell 0.5%, even as gross domestic product data showed the island state’s economy grew slightly more than initially expected in the first quarter.
Australia’s ASX 200 index fell 0.5%, falling from a three-month high as PMI data showed a deterioration in the services industry.
Gift Nifty 50 Futures for India’s Nifty 50 index pointed to a flat open, after the index stemmed a series of losses on Wednesday. Indian PMI readings are also due later in the day.