Asia tech firms lead losses as regional markets tumble

A Chinese investor looks at prices of shares on her smartphone. Photo: AFP

The retreat is the latest to hit Asia as investors fret over a recent rally that has sent several indexes to record highs, though a surprise jump in a gauge of Chinese factory activity provided some support to Shanghai.

While Wall Street saw the Dow chalk up a fresh record following strong US economic growth figures, the Nasdaq took a hammering with analysts pointing to a technical shift ahead of a Senate debate on tax cuts this week.

"The prospect of US tax cuts actually being passed appears to have prompted a value rotation away from the FANG stocks and the tech-heavy Nasdaq and back toward financials and other sectors of the market that will benefit if the tax bill does indeed pass into law," said Greg McKenna, chief market strategist at AxiTrader.

FANG refers to tech titans Facebook, Apple, Netflix and Google - which now trades as Alphabet - that have been at the forefront of a market surge in the sector this year.

The selling flooded through to Asia, where Samsung dived 3.4 per cent and Sony lost 2.3 per cent. Tencent - which recently joined the US$500 billion market value club - was down 3.3 per cent in Hong Kong, where AAC Technologies plunged 6.2 per cent.

On broader markets Hong Kong was down 1.5 per cent, while Shanghai ended down 0.6 per cent. Investors brushed off data showing activity in China's manufacturing sector smashed forecasts, a much-needed positive reading on the world's number-two economy after a series of disappointing indicators.

Investors in China and Hong Kong are also still on edge over a Beijing-led crackdown on speculative trading that has put limits on certain types of risky dealing.

POUND RALLIES

Seoul sank 1.5 per cent, hit by the dive in heavyweight Samsung and after the Bank of Korea hiked interest rates for the first time in six years citing a continued improvement in the economy and despite concerns about an increasingly belligerent North.

The move has fuelled speculation it could spark a broad move across Asia's central banks to lift rates as they try to avoid capital outflows with the US Federal Reserve on course to tighten policy.

Sydney was off 0.7 per cent after news that an independent inquiry into Australia's financial services sector had been set up in a bid to quell public anger at the massively profitable banking system following a series of scandals. The country's "big four" lenders - ANZ, Commonwealth, NAB and Westpac - were all down.

Singapore, Taipei and Jakarta also suffered losses.

However, Tokyo bounced back from morning selling to end 0.6 per cent higher as a weaker yen fuelled hope for better earnings for Japan's exporters.

The dollar rallied against the yen as optimism about the progress of tax reform was mixed with news that the US economy had enjoyed its best growth in three years, reigniting expectations for higher US borrowing costs over the next year.

The pound extended its rally against the dollar following reports British and European Union negotiators were close to a divorce settlement deal.

Bitcoin was holding above the US$10,000 mark it broke for the first time on Wednesday, but is well down from the record US$11,434 it touched briefly in US trade.

In early European trade London lost 0.3 per cent, Paris added 0.1 per cent and Frankfurt was flat.

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: UP 0.6 per cent at 22,724.96 (close)

Hong Kong - Hang Seng: DOWN 1.5 per cent at 29,177.35 (close)

Shanghai - Composite: DOWN 0.6 per cent at 3,317.19 (close)

London - FTSE 100: DOWN 0.3 per cent at 7,371.41

Pound/dollar: UP at US$1.3466 from US$1.3412 at 2200 GMT

Euro/dollar: UP at US$1.1865 from US$1.1848

Dollar/yen: UP at ¥112.30 from ¥111.97

Oil - West Texas Intermediate: UP 20 cents at US$57.50 per barrel

Oil - Brent North Sea: UP 29 cents at US$62.82 (new contract)

New York - DOW: UP 0.4 per cent at 23,940.68 (close)