Asian stocks steady after Wall Street tech rout, US dollar holds gains

Pedestrians are reflected on a stock quotation board of the Tokyo Stock Exchange.
Pedestrians are reflected on a stock quotation board of the Tokyo Stock Exchange.PHOTO: AFP

SINGAPORE (REUTERS) - Asian stocks were steady on Friday (June 16), appearing to take in stride the resumption of the US technology rout overnight, while the US dollar held near a two-week high after solid economic data backed the case for tighter U.S. monetary policy.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat, on track to end the week down 0.7 per cent.

Japan's Nikkei jumped 0.5 per cent, narrowing its loss for the week to 0.4 per cent.

Overnight, the Nasdaq led losses on Wall Street with a 0.5 per cent drop, dragged lower by shares including Apple and Alphabet that tumbled on bearish analysts' reports. The S&P 500 technology index also declined 0.5 per cent.

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The broader S&P 500 index fell 0.2 per cent and the Dow Jones Industrial Average slipped 0.1 per cent.

"It was a brutal day for the tech sector once again as investors are increasingly more worried about the (Federal Reserve) tightening cycle and how that would put a number of firms in trouble," Naeem Aslam, chief market analyst at ThinkMarkets in London, wrote in a note. "The tech boom has been on the back of easy money and lower interest rates. Both of them are leaving town."

South Korea's KOSPI shook off the US woes to inch higher, with the biggest company, Samsung Electronics jumping 0.5 per cent early on Friday.

The second biggest firm, semiconductor concern SK Hynix, climbed 1.5 per cent to a 15-year high.

Analysts have attributed the outperformance of Asian technology company shares to their lower valuations relative to US peers.

In currencies, the dollar remained near a two-week high hit overnight after data showed the number of Americans filing for unemployment fell more than expected last week.

A better-than-expected business conditions survey for June also bolstered the case for Fed tightening this year.

The dollar index, which tracks the greenback against a basket of trade-weighted peers, inched up almost 0.1 per cent, extending Thursday's 0.5 per cent gain. It's on track for a 0.2 per cent rise this week.

The dollar was also marginally higher at 110.98 yen, adding to Thursday's 1.2 per cent jump, poised to end the week 0.6 per cent higher.

The Bank of Japan meets today and is expected to leave monetary policy unchanged and signal confidence in a strengthening economy, as a tightening job market and solid global demand support a view that a recovery is gaining momentum.

The pound added 0.1 per cent to US$1.277. On Thursday, it jumped to as high as US$1.28 on signs of a shift in the Bank of England's stance on keeping interest rates at record lows, but fell back to close flat.

In commodities, oil was lower on continued worries over rising US gasoline inventories adding to already elevated global supply.

US crude fell 0.1 per cent to US$44.39 a barrel, remaining near Thursday's six-week low, on track for a 3.1 per cent drop for the week.

Global benchmark Brent also slipped 0.1 per cent to US$46.86, set to end the week 2.7 per cent lower.

Gold crept higher following Thursday's 0.6 per cent drop on the dollar's strength. It was marginally higher at US$1,254.25 an ounce early on Friday, but still poised to close the week with a 0.9 per cent loss.