Asian stocks posted their biggest decline in seven weeks on Friday, as Japanese corporate sentiment deteriorated and a broad-based selloff from consumer-discretionary companies to healthcare engulfed the region’s equities markets.
The MSCI Asia Pacific Index dipped to 125.93 in Tokyo on Friday, down 2.3 percent from Thursday and 1.5 percent from last week. However, the equity gauge climbed 8.2 percent last month, the best month since October last year, to end a tumultuous quarter for global markets. Equities had rebounded from lows in February as the US Federal Reserve reassured investors that it would not rush to increase borrowing costs.
A stellar performance last month was tested immediately on the first day of the second quarter. Japan’s TOPIX lost 3.4 percent, the worst start to a quarter since 2008, after the tankan index of confidence among large manufacturers missed economist estimates. The index lost 4.7 percent this week after capping a 13 percent quarterly drop.
“After strong gains from their February lows, shares are overbought and vulnerable to a pullback,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd, which oversees about US$122 billion. “March-quarter tankan business conditions and confidence readings were disappointing,” he said.
The tankan index of sentiment plummeted to 6 in the first quarter, the lowest level since the middle of 2013, from 12 in the previous three months, the Bank of Japan reported on Friday.
Economists had expected a reading of 8. A positive number means there are more optimists than pessimists among manufacturers.
In Taipei, shares took a beating on Friday, as investors rushed to cut their holdings amid concern over possible negative leads in global financial markets during the four-day Tomb Sweeping holiday starting yesterday, dealers said.
Turnover was low as many investors stayed on the sidelines ahead of the release of US non-farm payroll data, dealers said.
The TAIEX closed down at 8,657.55, down 1 percent from Thursday and 0.5 percent from last week.
Selling focused on large-cap stocks like Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which fell 2.2 percent to NT$158.50, as investors locked in gains from recent sessions, dealers said.
Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer, shed 2.1 percent to end at NT$83.00 and chip designer MediaTek Inc (聯發科) dropped 2.4 percent to NT$241.
Bucking the downturn on the broader market, smartphone camera lens supplier Largan Precision Co (大立光) rose 0.6 percent to finish at NT$2,510.
In the financial sector, Fubon Financial Holding Co (富邦金控) fell 1.5 percent to NT$40.40, CTBC Financial Holding Co (中信金控) lost 1.5 percent to end at NT$16.75 and Cathay Financial Holding Co (國泰金控) finished 2.1 percent lower at NT$37.75.
“With the index falling below the 20-day moving average of around 8,700 points, the local main board has become weaker technically and more selling is likely to follow,” KGI Securities Co (凱基證券) analyst Phil Chu said.
The Shanghai Composite Index rebounded in late trading on Friday, as a surprise jump in an official factory gauge increased optimism about the economy and speculation grew that state-backed funds intervened to support the market after Standard & Poor’s (S&P) cut the nation’s credit-rating outlook.
The stock measure swung to gains in the last 30 minutes of trading, rising 0.2 percent and erasing a loss of as much as 1.6 percent. China’s financial markets are shut tomorrow for a holiday.
S&P lowered the outlook for China’s credit rating to negative from stable, saying the nation’s economic rebalancing is likely to proceed more slowly than the ratings firm had expected. The reduction may not have much of an impact on the markets, as it comes at a time when the nation’s stocks are rallying and the currency is stabilizing, Sinopac Securities (Asia) Ltd (永豐金證券亞洲) said.
Australia’s S&P/ASX 200 Index declined 1.6 percent on Friday, after jumping 1.5 percent on Thursday. New Zealand’s S&P/NZX 50 Index slipped 0.7 percent after closing at a record-high a day earlier.
South Korea’s KOSPI fell at least 1 percent. Hong Kong’s Hang Seng Index lost 1.3 percent. The Hang Seng China Enterprises Index of mainland stocks traded in the territory retreated 1.8 percent after this week re-entering a bull market.
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
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day