Asian stocks declined for the first week in four, with the region’s benchmark index retreating from the highest level since May, on signs of slower growth in the US and China and amid concern Europe’s leaders were not making progress in solving the region’s debt crisis.
The MSCI Asia Pacific Index slid 0.4 percent to 120.28, erasing an advance for the week during the final day of trading. The gauge closed on Thursday at the highest level since May 4, before a weaker-than-expected employment report and wilting consumer confidence dragged it lower. About five stocks fell for every three that rose through the week.
“The rally seems to have been a bit more about hope over reality,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management. “Clearly economic data has been pretty poor. The practicalities of what needs to be done to address this are huge.”
Stocks on the index were valued at 12.6 times estimated earnings on average, compared with 13.7 for the Standard & Poor’s 500 Index and 11.6 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
Taiwan’s TAIEX slid 0.37 percent on Friday and closed the week down 0.1 percent at 7,477.53 on renewed concerns over corporate earnings after Pegatron Corp (和碩), one of the nation’s leading contract notebook computer makers, reported disappointing second-quarter results, dealers said.
Pegatron fell by the maximum daily limit of 7 percent to NT$37.00 after the company said earnings plummeted by 35.6 percent from the first quarter.
“The lower-than-expected earnings released by Pegatron yesterday [Thursday] have made many investors wary. There have been fears that more negative leads will come next week before the deadline,” Grand Cathay Securities (大華證券) analyst Mars Hsu (徐振家) said, referring to the Aug. 31 deadline for companies to report second-quarter results.
However, select market heavyweights, in particular HTC Corp (宏達電), staged a technical rebound to prevent the index from falling further as investors took advantage of their relatively low valuations after a recent slump, dealers said.
The smartphone vendor gained 4.8 percent to NT$262.50 on Friday on hopes it would launch new products next month to boost sales.
Japan’s Nikkei 225 Stock Average lost 1 percent this week and South Korea’s KOSPI slid 1.4 percent. Australia’s S&P/ASX 200 Index retreated 0.5 percent as Reserve Bank of Australia Governor Glenn Stevens said policymakers were prepared to respond in the event the economy slows, predicting the nation’s mining investment boom has at least another year before easing.
Hong Kong’s Hang Seng Index declined 1.2 percent and the Shanghai Composite Index slid 1.1 percent. China may have overstated its industrial production data for this year to conceal the economy’s weakness, Dallas Federal Reserve economists Janet Koech and Jian Wang wrote in a paper. Separately, HSBC Holdings PLC cut China’s growth forecast for this year to 8 percent from 8.4 percent.
In other markets on Friday:
Wellington lost 1.11 percent, or 40.75 points, from Thursday to close at 3,622.59.
Manila was 1.14 percent, or 59.49 points, lower from Thursday at 5,143.35.
Mumbai slipped 0.38 percent, or 67.01 points, from Thursday to 17,783.21.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
RSS