Asian tech stocks fell on Tuesday as investors fretted over AI spending and earnings, with South Korean and Taiwanese shares leading the decline. Oil steadied after the previous session's tumble ahead of the start of US midterm voting.
Asian tech stocks came under fresh pressure on Tuesday as investors fretted over AI spending and earnings. Oil prices stabilised after the previous session's tumble, ahead of the start of voting for the US midterm elections.
South Korean and Taiwanese shares lead the slide
MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.4% at the lowest level since October 23, led by a decline of as much as 4.1% in South Korean shares. Taiwanese shares slid 3.3%, putting the local benchmark on track to confirm a technical correction after losses extended to 13.1% from a record high in early October.
Shares in China fell 1.4%, with investors disappointed at the latest moves by authorities to shore up a market that is the year's weakest performer among major indexes. Japanese markets were closed for a holiday.
Bank of America analysts wrote in a note that "Korea and Taiwan equity outflows continue to dominate" within Asia, given rising concerns around the sustainability of the tech cycle.
Australian shares bucked the trend, rising 0.3%. The Aussie dollar slipped 0.3% to $0.6978 after the Reserve Bank of Australia lifted its cash rate target, as expected, but with a 6-3 split vote and hints it might be on hold for a while.
S&P 500 and Apple slip as European futures fall
Overnight, the S&P 500 slipped 0.5%. S&P 500 e-mini futures edged lower for a fourth consecutive day, off 0.1%.
European futures fell 0.9%, German DAX futures slid 0.8% and FTSE futures were 0.2% lower. Apple shares extended losses, falling 2.8% in after-hours trading after the iPhone maker on Monday forecast lower gross margins for the crucial holiday quarter, citing rising memory-chip costs.
Investors prepare for US midterm voting and weigh Iran talks
Investors are also preparing for voting in the US midterm elections, where President Donald Trump's Republican Party is facing a challenge to keep its hold on Congress. Opinion polls favour the Democrats to win the House, though the Senate remains too close to call. Prediction market sites Polymarket and Kalshi currently assign probabilities of 77% and 76%, respectively, that the Democrats will control the Senate.
A surprise Republican sweep would likely lift yields and the dollar, said Steve Englander, co-head of FX research at Standard Chartered. The yield on the US 10-year Treasury bond was up 2.1 basis points at 4.913%.
Oil prices steadied after a fall, with Brent crude up 0.5% at $105.30 in Asian trading as investors weighed the state of peace talks between the US and Iran.
ING analysts wrote in a note that markets will have guidance on the midterm implications and the US Treasury's quarterly refunding announcement by tomorrow.
Source: Economy News
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