Asian stocks drop after global markets fall on tech sell-off

Asian shares mostly slumped on Wednesday after global markets fell as traders locked in profits following recent tech-driven rallies.

Gold prices and bitcoin hit all-time highs Tuesday before reversing gains, while the sell-off in some technology stocks hit many markets around the world.

Wall Street's three main indexes declined, with the tech-rich Nasdaq ending the day 1.7 percent lower, pulled down by Apple and Tesla.

Apple's shares fell after news that iPhone sales in China were lower early this year, serving as "a stark reminder of the ongoing trade tensions between the United States and China", Stephen Innes of SPI Asset Management said in a note.

While US stock indices are up sharply on the year, the recent rallies have relied heavily on a few mega-cap stocks.

"Negative news about these key players can trigger a broader pullback across the entire index spectrum, even more so if sales worries emanate from China, which makes up a hefty portion of these tech behemoth earnings from a geographical perspective," Innes said.

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If former US president Donald Trump is re-elected and were to impose significant tariffs on Chinese imports, trade tensions could escalate, he added.

"US tech investors could pay the price."

On Tuesday, Asian markets faltered after China kicked off its annual rubber-stamp legislative session by setting an ambitious 2024 growth target of five percent.

The figure is in line with last year's goal but well off the double-digit expansion that for years drove the world's second-largest economy.

Traders were underwhelmed and global equities wobbled.

"Premier Li (Qiang)'s opening speech to the National People's Congress yesterday indicates China is staying the course, in terms of refraining from a big stimulus," economists Duncan Wrigley and Kelvin Lam of Pantheon Macroeconomics said in a note.

Experts have called for deeper interventions to aid China's flagging economy, which is beset by a prolonged property sector crisis, record youth unemployment, and a global slowdown that is hammering demand for Chinese exports.

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Wrigley and Lam said Beijing was "balancing the imperative to support short-term growth and employment with the desire to shift the growth model towards advanced manufacturing and away from an over-reliance on real estate."

The country was likely to "rely mainly on fiscal support to keep growth at an acceptable level, while monetary policy will play an accommodative role, with only token rate cuts," they added.

In addition to the NPC, investors will be focused on congressional testimony by Federal Reserve chair Jerome Powell on Wednesday and Thursday, as they seek signs of when the US central bank might start cutting rates.

Most analysts expect highly anticipated Fed rate cuts to begin later this year, as officials have voiced caution about trimming too soon while they await further inflation data.

US jobs figures are due on Friday.

Shares in Tokyo, Shanghai, Sydney, Seoul, Manila, Wellington and Kuala Lumpur were all lower on Wednesday. Hong Kong, Taipei, Singapore and Jakarta were up.

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Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 0.3 percent at 39,998.91

Hong Kong - Hang Seng Index: UP 0.8 percent at 16,291.42

Shanghai - Composite: DOWN 0.3 percent at 3,039.01

Euro/dollar: DOWN at $1.0850 from $1.0860 on Tuesday

Dollar/yen: DOWN at 149.96 yen from 149.97 yen

Pound/dollar: DOWN at $1.2698 from $1.2707

Euro/pound: FLAT at 85.44 pence

Brent North Sea Crude: DOWN 0.1 percent at $81.99 per barrel

West Texas Intermediate: FLAT at $78.15 per barrel

New York - Dow: DOWN 1.0 percent at 38,585.19 points (close)

London - FTSE 100: UP 0.1 percent at 7,646.16 (close)

Source: AFP