Asian tech firms track Wall St losses as US tax boost wanes

HONG KONG (AFP) – Tech giants including Samsung and Tencent sank in Asian trade yesterday, tracking a sell-off in their US rivals and dragging most regional markets lower.

While investors welcomed news that the US Senate had finally passed controversial tax reforms, the deal must still be reconciled with a House bill, while the probe into alleged Russian meddling in last year’s election continues to dog Donald Trump.

The Dow closed at a record high on Wall Street but the Nasdaq tumbled more than one per cent as dealers shifted out of the tech sector, which has enjoyed a healthy rally through the year, and into financial firms.

“The high-tech sell-off has worsened overall sentiment,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.

“Investors seem to be rebalancing (their portfolios) to take profits towards the end of the year, moving out of high-performing technology and health care issues into financial stocks that are likely to fare well next year,” Matsuno told AFP.

Samsung fell 0.2 per cent, while Tencent sank 1.9 per cent and Sharp lost more than two per cent.

On broader markets Tokyo ended 0.4 per cent lower and Hong Kong had eased 0.5 per cent in the afternoon, while Sydney and Shanghai each dipped 0.2 per cent by the close.

Wellington, Jakarta and Kuala Lumpur were also lower but Seoul, Singapore and Manila edged up.

Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, also warned of the possibility of a delay to a key corporate tax cut as part of the Senate-House talks.

“I still believe that the market is pricing in a lot of optimism and if lawmakers delay implementation of this policy to 2019, I would expect to see a correction accordingly,” he said.

On currency markets the pound continued to struggle against the dollar after falling on news that British and European negotiators had failed to reach an agreement on Brexit.

Sterling had rallied on hopes British Prime Minister Theresa May was close to a divorce deal. But the talks collapsed after the Democratic Unionist Party said it would not back her position on the future of the Northern Irish border.

The British unit sank from a high of $1.3539 to $1.3414 on the news before edging back slightly.