Most Asian stocks fell on Tuesday, extending recent losses as the technology sector saw little respite from concerns over stretched artificial intelligence valuations.
Caution before a string of key U.S. and regional economic readings also weighed, as did fears of a potentially hawkish Bank of Japan later this week.
Regional markets took a weak lead-in from Wall Street, which retreated in overnight trade on persistent losses in tech. The sector’s latest rout was sparked by middling guidance and oversized spending plans from Broadcom and Oracle last week.
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S&P 500 Futures fell 0.4% by 20:35 ET (01:35 GMT), with focus squarely on upcoming U.S. nonfarm payrolls and consumer price index inflation data due this week.
Japanese stocks slide as BOJ looms
Japan’s Nikkei 225 and TOPIX indexes fell between 1% and 1.3% on Tuesday, pressured by losses in tech and broader sectors.
Markets turned cautious towards Japan in anticipation of potentially hawkish signals from the BOJ, when it meets later this week.
Investors were on guard over a potential rate hike, especially after BOJ officials signaled they will consider raising interest rates amid recent upticks in inflation.
Before the BOJ’s decision, key Japanese CPI inflation data is also due this week.
Japanese markets took little support from purchasing managers index data showing a mild improvement in manufacturing activity, while growth in services cooled slightly.
Asia tech slides as AI jitters persist
Tech-heavy Asian bourses remained the worst performers in the region, with South Korea’s KOSPI and Hong Kong’s Hang Seng losing about 1.7% apiece. Losses in tech also weighed heavily on Japan’s Nikkei, while TSMC (TW:2330), the world’s biggest chipmaker, fell 1.4% in Taiwan trade.
Tech remained on the backfoot amid growing questions over massive AI-fueled valuations, especially after middling signals from Oracle Corporation (NYSE:ORCL) and Broadcom Inc (NASDAQ:AVGO) last week raised concerns over stretched spending on AI data centers. U.S. tech stocks broadly tumbled since last week.
Sectors beyond tech also retreated. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell about 1% each, pressured by concerns over the world’s second-largest economy following a string of weak readings for November.
Renewed fears of a real estate debt crisis, as major developer China Vanke (HK:2202) races to restructure its debt, also weighed on Chinese markets.
Australia’s ASX 200 fell 0.4% after a private survey showed consumer sentiment deteriorated sharply in early-December, on concerns over rising inflation and steady interest rates.
Singapore’s Straits Times index fell 0.3%, while futures for India’s Nifty 50 index fell 0.2%.
Source: investing