Asian stocks fell for a fifth week, with the regional benchmark index capping its biggest monthly loss since May, as concern that the global economic recovery is faltering spurred investors to sell riskier assets.
The MSCI Asia-Pacific Index dropped 2.1 percent to 134.81 this week, the biggest weekly decline since August and capping a 4.6 percent fall for last month. Global stocks tumbled as a sell-off in emerging-market currencies prompted central banks to boost borrowing costs while the Federal Reserve moved ahead with a plan to further reduce stimulus.
“It’s been unsettling,” said Benjamin Collett, Hong Kong-based head of Asian equities at Sunrise Brokers LLP. “Volatility is up. If you want to step into this market, you have to be prepared to handle bigger swings, and evidently many exiting holders don’t like that.”
Japan’s TOPIX slumped 3.5 percent this week. The Nikkei 225 Stock Average tumbled 3.1 percent to cap its biggest monthly rout since May 2012 as a gauge tracking the volatility of the stock measure surged 28 percent.
Australia’s S&P/ASX 200 Index declined 1 percent and New Zealand’s NZX 50 Index was little changed. Hong Kong’s Hang Seng Index fell 1.9 percent while the Hang Seng China Enterprises Index of Chinese stocks listed in the city slid 2 percent. China’s Shanghai Composite Index lost 1 percent, while Singapore’s Straits Times Index dropped 1.6 percent.
India’s S&P BSE SENSEX dropped 2.9 percent after its central bank unexpectedly raised its benchmark interest rate to 8 percent from 7.75 percent to curb inflation. Only three of 45 analysts in a Bloomberg News survey predicted the move, with the rest expecting no change.
The Fed this week said it will reduce purchases by another US$10 billion to US$65 billion, sticking to a plan for a gradual withdrawal from its unprecedented monetary easing. The central bank, which announced its first US$10 billion reduction in December, left unchanged its statement that it will probably hold its target interest rate near zero “well past the time” that the unemployment rate falls below 6.5 percent.
“Sentiment will probably remain negative and slightly cautious on some of these emerging markets over the next couple of months as the Fed tapers stimulus,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd in Wellington, said by phone. “Given that there’s a bit of disappointment with recent earnings, things could weaken off a little bit this year.”
The MSCI Asia-Pacific index traded at 12.7 times estimated earnings compared with a multiple of 15.1 for the Standard & Poor’s 500 Index and 13.6 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
Of the 178 companies on the MSCI Asia-Pacific Index that have reported earnings since the beginning of January and for which estimates are available, 51 percent missed analyst projections for profit, according to data compiled by Bloomberg.
Fears about the state of the global economy saw the TAIEX drop 135.74 points to 8,462.57 as the Taipei markets closed on Monday for the Lunar New Year holiday, meaning the bourse closed the Year of the Snake down 1.58 percent to reverse 15 years of rallies at the final session of the lunar year.
Altogether, the benchmark TAIEX gained 7.03 percent in the Year of the Snake, while market capitalization increased 9.59 percent to NT$22.22 trillion in the lunar year, the exchange said in a statement.
The local bourse will repoen on Wednesday.
Elsewhere, Sydney ended flat on Friday, edging up 1.9 points to 5,190.0 and Wellington added 0.51 percent, or 24.74 points, to 4874.58. Mumbai gained 0.08 percent, or 15.60 points, to close at 20,513.85 while Bangkok added 0.81 percent, or 10.21 points, to 1,274.28.
Across the rest of Asia, the markets in Hong Kong, Shanghai, Seoul, Jakarta, Kuala Lumpur, Manila and Singapore were also closed for the Lunar New Year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts