Asian shares fell on Friday, extending their biggest monthly drop since the height of global COVID-19 lockdowns in March last year due to lingering investor concern over regulatory crackdowns in China on the education, property and tech sectors.
Losses grew even after reassurances from Chinese regulators and official media helped to soothe investors’ nerves a day earlier, and following indications from the US Federal Reserve that its bond-buying program would remain unchanged for now.
A continuing outbreak of the Delta variant of SARS-CoV-2 in China’s Jiangsu Province also weighed on the mood on Friday.
“It’s clear investors are very rattled by the regulatory crackdown,” said Michael Frazis, portfolio manager at Frazis Capital Partners in Sydney, adding that the market continues to face other near-term pressure.
“You will have talk about tapering, and you do have a lot of coronavirus beneficiaries which are largely in the tech sector. [Earnings] growth will be slow, and they will be reporting numbers off of very high bases for this time last year... We expect tech indices to be challenged in the near term, but we’re very optimistic over the medium and long term.”
On Friday, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.33 percent, taking its losses for the month to more than 7 percent.
In Taipei, the TAIEX ended down 155.40 points, or 0.89 percent, at 17,247.41, after moving between 17,237.67 and 17,429.01. Turnover totaled NT$535.965 billion (US$19.16 billion). The index dropped 1.85 percent from a week earlier.
Japan’s Nikkei 225 dipped 1.8 percent to 27,283.59, its 11th straight month of declines on the last trading day in the month. For the week, it lost 0.96 percent. The broader TOPIX dropped 1.37 percent to 1,901.08, posting a weekly decline of 0.17 percent.
The Shanghai Composite Index dropped 0.42 percent to 3,397.36, diving 4.31 percent from a week earlier.
Hong Kong’s Hang Seng Index fell 1.35 percent to 25,961.03, losing 4.98 percent on the week.
South Korea’s KOSPI declined 1.24 percent to 3,202.32, posting a weekly drop of 1.6 percent, while Australia’s S&P/ASX 200 lost 0.33 percent to 7,392.6, dipping 0.02 percent from a week earlier.
The declines in Asia came despite robust US earnings and forecasts, as well as strong second-quarter economic growth figures, that helped to lift Wall Street to record intraday highs on Thursday.
In the second quarter, the US economy grew past levels seen before the COVID-1`9 pandemic, helped by rising vaccination numbers and government aid, although the expansion fell short of expectations and rising infections are clouding the outlook for the third quarter.
Additional reporting by staff writer, with CNA
Alphabet Inc’s Google on Tuesday announced plans to buy a New York office building for US$2.1 billion, confirming its push into the US’ largest city despite the COVID-19 teleworking trend. This is the largest real-estate purchase in the US for an office building since the beginning of the global spread of COVID-19, the Wall Street Journal quoted Real Capital Analytics as saying. Google already rents the premises in Manhattan, which are located on the site of a former railroad terminal in the Hudson Square neighborhood. The Silicon Valley giant envisions a campus with a total surface area of 160,000m2 by mid-2023
‘CORE VALUES’: The contract chipmaker did not specify why the employees were dismissed, but media reports said they had leaked information about customer orders Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has fired seven of its employees for violating the company’s “core values,” the world’s largest contract chipmaker said yesterday. While the company did not disclose exactly why it fired the seven employees, local media reports earlier in the day said that the employees had leaked confidential information about customer orders. In a statement, the company said that it fired the seven at once, adding that it released an internal notice last week to inform the entire company of the move ahead of the four-day Mid-Autumn Festival holilday, which ended on Tuesday. TSMC said it fired the seven
MILD ADJUSTMENT: Two previous efforts failed to curtail mortgage financing, although the new measures should not affect property prices, the central bank governor said The central bank yesterday tightened credit controls for second-home mortgages in specific areas and purchases of plots of land, especially in industrial parks. However, the nation’s top monetary policymaker kept its policy rate at a record-low 1.125 percent for the sixth consecutive quarter, despite revising up its GDP growth forecast for this year from 5.08 percent to 5.75 percent. “Board members factored in economic uncertainty at home and around the world,” central bank Governor Yang Chin-long (楊金龍) said, adding that growing inflationary pressure was a temporary phenomenon induced by bad weather and a low base effect for oil prices. International fuel price increases
DOWNCYCLE: Most buyers are wary about placing new orders, and although the decline could also be as little as 3%, it would be the first drop since the start of the year The average selling price of DRAM chips next quarter is expected to decline by up to 8 percent quarter-on-quarter, with memory chips used in notebook computers and consumer electronics seeing the steepest decline due to excess inventory and a shortage of components, market researcher TrendForce Corp (集邦科技) said yesterday. That means the DRAM industry is entering a new downcycle after experiencing a boom for three quarters, the longest uptrend in the history of the industry. The Taipei-based researcher said it expects the balance between supply and demand to begin tilting toward a surplus in the final quarter of this year. Most DRAM