Asian shares on Friday retreated from a 10-year high as technology firms led declines following earnings from US heavyweights, including Amazon.com Inc and Twitter Inc.
The MSCI Asia Pacific Index dropped 0.7 percent to 159.25 as of 5:19pm in Hong Kong, erasing its weekly gain.
The MSCI Asia Pacific Information Technology Index fell 1.5 percent as the worst performing sub-gauge. The Asian technology benchmark is still up 37 percent this year, even with Friday’s selloff.
Twitter plunged 14 percent after it failed to lure more monthly users in the second quarter. Amazon.com shares declined in after-hours trading following its forecast for a potential quarterly loss for the first time in two years.
“After Amazon’s weaker-than-expected earnings, some investors are rotating from technology to energy and other sectors,” said Mark Matthews, Singapore-based managing director and head of Asia research at Bank Julius Baer Ltd. “It’s a small correction for technology shares. They’ll probably bounce back, because it’s not 2001 and they are not wildly overvalued.”
Samsung Electronics Co was the biggest drag on Asia’s regional benchmark, as investors took profits on expectations that the company’s earnings growth momentum will not be strong, You Seung-min, chief strategist at Samsung Securities, said in a telephone interview.
Amazon and Twitter dragged on US tech stocks overnight and “the unfavorable sentiment has spread over to Asian markets,” said Margaret Yang, a Singapore-based strategist at CMC Markets.
“With the current equities valuation in the US, investors would need really, really good earnings to justify the multiples,” Yang said.
The weighted index on the Taiwan Stock Exchange on Friday closed down 85.32 points, or 0.81 percent, at 10,423.05, down 0.3 percent from last week’s 10,436.70 points.
Hong Kong shares ended lower on Friday as investors took profit after strong gains earlier in the week, and following weakness overnight in U.S. technology stocks.
The Hang Seng index fell 0.6 percent, or 151.78 points, to 26,979.39 points, with losses centered in energy, technology and financial stocks. However, the benchmark posted gains for a third straight week, up a little more than 1 percent.
The Hong Kong China Enterprises Index fell 0.9 percent to 10,756.08 on Friday. For the week, it shed 0.3 percent.
Technology sector giant Tencent Holdings Ltd (騰訊), which has gained more than 60 percent this year and was up 2.5 percent in the previous session, took a breather. The stock finished the session 1.2 percent lower.
Japan’s Topix on Friday lost 0.4 percent and the Nikkei 225 index fell 0.6 percent, both posting weekly losses amid the tech selloff.
The Shanghai Composite Index inched up 0.1 percent.
South Korea’s KOSPI lost 1.7 percent, the biggest decline since November last year, while KOSPI 200 fell 2 percent as the nation’s industrial output fell 0.3 percent annually.
In India, the S&P BSE SENSEX and the NIFTY 50 both fell 0.5 percent. The SENSEX retreated from a record high due to a decline in drugmakers.
Singapore’s Straits Times Index slipped 0.7 percent while FTSE Bursa Malaysia KLCI fell 0.2 percent.
In Indonesia, the Jakarta Composite gained 0.2 percent, while Thailand’s SET shed 0.1 percent.
The Philippines’ PSEi rose 0.3 percent and Vietnam’s VN-Index added 0.7 percent.
Additional reporting by CNA and Reuters
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