Asian equities opened lower on Tuesday, November 20, 2018, after a bruising overnight session on Wall Street that hit technology stocks and dragged confidence across global markets. The dollar also softened as fresh U.S. data reinforced concerns about the strength of the American economy.
MSCI’s broad Asia-Pacific index excluding Japan slipped 0.3 percent. Australian shares fell 0.7 percent, while South Korea’s tech-heavy market lost 0.9 percent as investors continued to trim exposure to semiconductor and hardware names.
In Seoul, Samsung Electronics declined 2.1 percent and SK Hynix Inc fell 3 percent. In Japan, Tokyo Electron dropped 2.5 percent, Advantest lost 1.8 percent and Sony Corp shed 2.8 percent.
Japan’s Nikkei was down 1 percent. Nissan Motor Co tumbled about 6 percent after chairman Carlos Ghosn was arrested on Monday over alleged financial misconduct, with the company saying he would be removed from the board later in the week.
U.S. markets had already taken a heavy hit on Monday, with the Nasdaq falling 3 percent as investors dumped Apple, internet names and other technology shares. Uneven signals from Washington and Beijing over their trade dispute added another layer of caution.
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo, said: “The drop by U.S. stocks will cut short any attempt by equity markets to mount a sustained bounce. Investor sentiment has been subdued by lingering weakness in U.S. technology shares,”
Broader worries about slowing global momentum, higher borrowing costs and trade tensions have been pressuring equities for weeks. The sell-off has already erased trillions of dollars in value, with October standing out as a particularly severe month for losses.
In currency markets, the dollar hovered near a two-week low against a basket of major peers after Monday’s data showed U.S. home builder sentiment suffered its steepest monthly drop in more than 4-1/2 years in November.
The greenback had also come under pressure after Fed Vice Chair Richard Clarida and Dallas Fed President Robert Kaplan raised concerns late last week about a possible global slowdown. Even so, the U.S. currency remained up for the year, supported by three Federal Reserve rate hikes and a still-solid economy, though some traders were starting to question how long that strength could last.
Long-term U.S. Treasury yields slipped to a seven-week low of 3.052 percent, helping keep the dollar index near 96.120, close to the 11-day low reached on Monday. The euro was little changed at $1.1455 after rising 0.35 percent overnight.
The dollar also eased to a three-week low of 112.40 yen before last trading at 112.48. In energy markets, U.S. crude futures rose 0.3 percent to $57.36, extending the previous day’s gains on reports of a drawdown in U.S. oil inventories, possible European Union sanctions on Iran and talk of potential OPEC production cuts.
Editing by Shri Navaratnam
