Published 05/30/2024, 11:08 PM
Asian stocks fell on Thursday due to persistent fears of sticky inflation and high interest rates. The technology sector saw the steepest declines as investors locked in recent profits. Fears of high interest rates remained a concern ahead of key economic readings this week. US stock index futures extended losses in Asian trade, with focus on upcoming GDP and PCE price index data. Tech-heavy indexes were the worst performers, with Japan’s Nikkei 225, Hong Kong’s Hang Seng, and South Korea’s KOSPI down between 1% and 1.5%. The initial AI-driven rally in the sector appeared to be winding down, and decreased risk appetite led investors to lock in gains. Chipmaking stocks, which had the most exposure to the AI rally, were the biggest decliners. However, Chinese stocks fell relatively less, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes losing about 0.2% each, supported by promises of more policy support from Beijing.
Tech and Chipmaking Stocks Lead Losses
Tech-heavy indexes in Asia, including Japan’s Nikkei 225, Hong Kong’s Hang Seng, and South Korea’s KOSPI, fell between 1% and 1.5% as the AI-driven rally cooled. Chipmaking stocks, which had the most exposure to the AI rally, were the biggest decliners. Advantest Corp. (TYO:6857) slid 5.5%, SK Hynix Inc (KS:000660) fell 2%, and TSMC (TW:2330) (NYSE:TSM) sank 1.3%.
Outlier: Semiconductor Manufacturing International Corp
Semiconductor Manufacturing International Corp (HK:0981), the biggest chipmaker in China, jumped nearly 4% after becoming the third-largest chipmaker in the world by foundry capacity. The stock is set to benefit from Beijing’s new $45 billion fund to support local chipmaking efforts.
Chinese Stocks Fall Less
Chinese stocks fell relatively less, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes losing about 0.2% each. The People’s Bank promised more measures to foster economic growth, supporting sentiment.
Broader Asian Markets Retreat interest rates. Australia’s ASX 200 slid 0.6%, and futures for India’s NSEI index pointed to a negative open, with the index set for more losses as it retreated from record highs