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GLOBAL MARKETS-Asia stocks fall on tech rout contagion, global uncertainty
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GLOBAL MARKETS-Asia stocks fall on tech rout contagion, global uncertainty
Jul 18, 2024 7:37 PM

SINGAPORE, July 19 (Reuters) - Asian shares are set to

end the week on a sour note, as uncertainty across the

geopolitical landscape and in major economies added to headwinds

for investors even as the global rate easing cycle gets under

way.

It has been a turbulent week in markets, with a tech

sell-off sparked by deepening Sino-U.S. trade tensions,

uncertainty over U.S. President Joe Biden's fate in the

presidential race, disappointing Chinese economic data and a

lacklustre third plenum outcome casting a shadow over the global

mood.

In the foreign exchange market, Tokyo's recent bouts of

intervention also kept traders on edge.

"We could just be getting a taste of things to come. And

that is more turbulence," said Matt Simpson, senior market

analyst at City Index.

MSCI's broadest index of Asia-Pacific shares outside Japan

slid 0.1% and was headed for its worst week in

over a month with a 2.4% loss.

Japan's Nikkei fell to a more than two-week low and

was last down 0.1%, extending its sharp 2.4% fall from the

previous session.

The Nikkei looked set to end the week 2.7% lower, also its

steepest weekly decline in three months.

Technology stocks continued to struggle, with South Korea's

tech-heavy KOSPI index and Taiwan stocks both

easing more than 1%.

South Korean chipmaker SK Hynix ( HXSCF ) was last 0.7%

lower, though Japan's Tokyo Electron ( TOELF ), a chipmaking

equipment manufacturer, rebounded some 2.6%, after an 8.75%

tumble on Thursday.

Shares of Taiwan's TSMC, the world's largest

contract chipmaker, fell 1.3%, even after the company posted

better-than-expected earnings on Thursday and raised its

full-year revenue forecast.

In China, investors were left disappointed over the lack of

details provided on the implementation steps for achieving the

country's economic policy goals at the conclusion of its closely

watched plenum on Thursday.

Chinese blue-chips fell 0.08% in early trade,

while the Shanghai Composite Index edged 0.07% lower.

Hong Kong's Hang Seng index slid 1.5%.

"While more robust details are likely still forthcoming, we

interpret the initial communique as the third plenum failing to

deliver anything especially meaningful that would suggest

changes to the longer-term direction for the Chinese economy,"

said Brendan McKenna, international economist at Wells Fargo.

The onshore yuan opened a touch weaker at 7.2626

per dollar.

RATES FOCUS

The euro was last 0.02% lower at $1.0893, having

fallen 0.4% in the previous session after the European Central

Bank (ECB) kept rates on hold as expected but left the door open

to a September cut as it downgraded its view of the euro zone's

economic prospects.

"The policy statement gives little away, offering no

meaningful changes from June - continuing to stress a

data-dependent approach to policy setting," said Nick Rees, FX

market analyst at MonFX.

"We still think that a September cut remains the base case."

The dollar was meanwhile on the front foot, distancing

itself from a four-month low hit earlier in the week against a

basket of currencies.

Sterling dipped 0.03% to $1.2942, while the Australian

dollar fell 0.12% to $0.6698.

The dollar was underpinned by strong U.S. manufacturing data

and jobless figures that did little to suggest a significant

slowing in the labour market, though traders are still pricing

in a September rate cut from the Federal Reserve.

The yen was a touch firmer at 157.31, helped by

suspected bouts of intervention from Japanese authorities to

prop up the currency and as an acceleration in the country's

core inflation last month kept alive expectations that the Bank

of Japan could soon raise interest rates.

In commodities, oil prices fell, as mixed economic signals

weighed on investor sentiment.

Brent crude futures eased 0.58% to $84.62 a barrel,

while U.S. crude futures slid 0.81% to $82.15 per barrel.

Gold fell 0.8% to $2,425.19 an ounce, retreating from

a record high hit earlier this week on the prospect of lower

global interest rates.

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