World Economy

Sell-Off in Technology Firms Sends Asia Markets Into Reverse

In Hong Kong internet giant Tencent sank more than 4%.In Hong Kong internet giant Tencent sank more than 4%.

Asian markets reversed early gains Tuesday to sit mostly down in the afternoon as a sell-off in technology shares overshadowed a record close on Wall Street and a rally in energy firms.

After surging on years of low borrowing costs, the tech sector is suffering selling pressure from profit-taking around the world and increasing talk among central banks that the age of cheap money is coming to an end, AFP reported.

With big-name firms such as Apple and Google parent Alphabet suffering in recent weeks, their Asian counterparts are also feeling the pinch.

In Hong Kong internet giant Tencent sank more than 4% and speaker-maker AAC Technologies dived 2.4%, while Tokyo-listed Sony lost 1.7% and Sharp dived 1.9%. Samsung Electronics retreated 0.5% in Seoul.

Tokyo ended down 0.1%, Seoul slipped 0.6%, Singapore gave back 0.5% and Taipei 0.6%. Shanghai was off 0.4%. Hong Kong plunged 1.5%, with Kenny Wen, a strategist at Sun Hung Kai Financial in Hong Kong, telling Bloomberg News: “Many investors were betting 25,500 was the supporting level for the Hang Seng Index and have bought lots of futures on it.

“As the index fell below that level this morning, some people panicked and chose to sell their holdings.”

However, Sydney ended 1.8% higher after a more than 2% dive in the previous two days and as Australia’s central bank held off raising interest rates.

The losses came despite a positive lead from Wall Street where the Dow chalked up another record high ahead of Independence Day celebrations.

Markets reversed early gains that were led by energy firms as oil prices bounced.

Crude lost around a fifth of its value between mid-May and mid-June, hitting 10-month lows, as traders fretted that a pick-up in US output was offsetting cuts by OPEC and Russia.

But it has recovered around half of those losses in recent weeks as US firms have cut the number of rigs pumping, easing supply glut worries.

While both main contracts dipped on Tuesday, regional energy firms tracked the previous day’s gains of around 2% on the oil market.

PetroChina and CNOOC surged in Hong Kong, while Tokyo-listed Inpex was more than 1% up.

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