Technology stocks led the way lower in Asia on Wednesday, dragged by the sector’s slide in the U.S., as the region lost its early-week gains.
The Nikkei Stock Average NIK, -1.34% fell 1.3%, reversing much of Tuesday’s 2.7% jump. SoftBank 9984, -3.75% slid 3.8% and Nintendo 7974, -1.79% shed 1.8% even as the yen reversed some of the gains it made in U.S. afternoon trading.
A number of Asia Pacific stock indexes fell at least 1%, including Hong Kong’s. A gauge of technology stocks fell as Tencent 0700, -4.63% lost 4.6%, while smartphone-component suppliers AAC Technologies AAC, -5.46% and Sunny Optical 2382, -8.05% dropped by 6.3% and 8.1%, respectively. Hong Kong’s Hang Seng Index HSI, -2.50% slumped 2.5%.
South Korea’s tech-heavy Kospi SEU, -1.34% slid 1.3%, with index heavyweight Samsung Electronics 005930, -2.56% falling 2.6%.
Ayaz Ebrahim, portfolio manager for emerging markets Asia-Pacific at J.P. Morgan Asset Management, said the fund manager had reduced its “significant overweight” position in tech stocks during the past 18 months.
The asset manager has shifted into financial stocks. “We believe higher interest rates will benefit insurance companies as well as banks,” he said.
New Zealand’s NZX-50 NZ50GR, -1.41% skidded 1.4%. The New Zealand market was weighed by a2 Milk ATM, -6.50% , the country’s biggest company by market capitalization. It sank 6.5% on a report that Nestlé NESN, +0.81% has launched a competing infant-formula product in China. Still, a2 Milk shares are up 60% this year.
Some traditional safe havens saw buying. Gold futures and government-bond prices rose.
The 10-year Treasury yield TMUBMUSD10Y, -0.42% fell and hit levels last seen in early February at 2.78%, “as bond investors reacted to turmoil surrounding technology stocks, specifically Facebook FB, -4.90% ,” analysts from Lucror Analytics wrote in a research report. The yield on 10-year German bunds TMBMKDE-10Y, -1.48% dropped to 0.5% for the first time in almost three months. Yields fall when bond prices rise.
Analysts from Société Générale said pricing reflects “a scenario of extreme prudence” from the European Central Bank but would look “stretched” if the central bank ends its bond-buying program in 2018 and starts raising rates the following year.
In commodities markets, oil futures CLK8, -0.77% fell 0.8%, maintaining the drop seen after the U.S. settlement Tuesday as prices were hit by the slide in U.S. stocks.