Asian Tech Stocks Extend Global Rout on Concerns Over Rate Hikes
(Bloomberg) -- A global selloff in technology shares continued into Asia Thursday, following overnight losses on Wall Street as concerns grew about more aggressive monetary tightening by the Federal Reserve.
The MSCI AC Asia Pacific Communication Services Index, which tracks key tech names such as Tencent Holdings Ltd. and SoftBank Group Corp., dropped as much as 1.5% to its lowest since June 2020. Hong Kong’s Hang Seng Tech Index fell 1.1% in volatile trading, set for a fourth day of losses.
The selloff came after Fed officials said at a key meeting last month that a strengthening economy and higher inflation could lead to earlier and faster interest rate increases than expected. Asian tech firms have also been grappling with the fallout of China’s sweeping regulatory crackdown to curtail monopolistic behavior in the sector.
Among the region’s top losers, South Korea’s gaming company Kakao Games Corp. and Australia’s payment services firm Afterpay Ltd. dropped a maximum of about 11% each. Tokyo-based SoftBank Group Corp. fell as much as 2.2%.
Live-streaming platform operator Bilibili Inc. and short-video firm Kuaishou Technology, both backed by Tencent Holdings Ltd., were among the biggest casualties in Hong Kong amid continued worries over the tech giant’s recent moves to pare investment in the sector.
The selloff in growth stocks may be more prominent in the U.S. given their much higher valuations, said Jun Rong Yeap, market strategist at IG Asia Pte. “Hong Kong-listed tech firms, on the other hand, have already seen valuations beaten down so the downside risks from this aspect may seem limited.”
In addition to the less severe losses among Chinese tech firms versus thier U.S. peers, chipmakers in the region also demonstrated some degree of resilience. Samsung Electronics Co. and SK Hynix Inc. both edged up after losing more than 1% earlier.
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