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Asian shares subdued as tech blues offset U.S. tax cut hopes

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - Asian were subdued on Tuesday as investors' rotation out of technology took the toll on some of the region's tech heavyweights although hopes of a major cut in the United States underpinned risk sentiment.

MSCI's broadest index of Asia-Pacific outside Japan <.MIAPJ0000PUS> were capped by the fall in the region's technology shares, with Samsung Electronics <005930.KS> losing 1.5 percent.

Japan's Nikkei <.N225> fell 0.4 percent, with semiconductor-related such as Tokyo Electron <8035.T> and Shin-etsu Chemical <4063.T> leading the losses.

On Wall Street, the benchmark S&P 500 <.SPX> finished lower on Monday after setting a record intraday high earlier as the technology sector <.SPLRCT>, which has led Wall Street's record-setting rally this year, tumbled 1.9 percent.

The tech index hit a five-week low and was down 4.3 percent from its record peak hit a week ago although it still remained the best performer of the year with year-to-date gains of 33 percent.

Investors switched to banks and retailers, which are seen benefiting from the expected corporate cuts.

President Donald Trump's goal of slashing taxes on businesses cleared an important hurdle at weekend when the U.S. Senate narrowly approved the Republican's overhaul plan.

The S&P 500 banks index <.SPXBK> surged 2.3 percent while battered department store also jumped.

"Some high-tech shares' valuations are getting stretched. For the entire market to keep rallying, we needed a sector rotation," said Nobuyuki Kashihara, head of research at Asset Management One.

"On the whole, the world's are supported by a synchronized growth in the economy," he added.

The cut hopes supported the in the currency market, particularly against the yen.

The dollar fetched 112.48 yen , after a brief foray to 113.09 on Monday, which was its highest level in more than two weeks.

The euro was steadier at $1.1866, sitting comfortably in its familiar trading range between $1.1810-1.1960, as the common currency was helped by hopes the two major German parties will form a grand coalition.

The British pound stood at $1.3475, off last week's two-month high of $1.3550, after European Commission President Jean-Claude Juncker and British Prime Minister Theresa May failed to reach an agreement on a divorce deal.

Bitcoin was traded at $11,571, hovering near its record high of $11,800 set on Sunday.

Oil steadied after falling more than 1 percent on Monday on profit-taking as the market eyed signs of rising U.S. production.

But their prices remained close to recent two-year highs thanks to last week's decision by OPEC and other producers to extend output cuts.

U.S. West Texas Intermediate futures traded at $57.50 per barrel, little changed in early Asian trade.

(Editing by Simon Cameron-Moore)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, December 05 2017. 06:24 IST