Asia shares dragged under by US tech slide, dollar firm

ASIAN STOCKS fell on Monday, with electronics heavyweights such as Samsung Electronics knocked lower by a slide in US tech shares and caution ahead of this week’s US Federal Reserve policy meeting. Spreadbetters expected European shares to follow suit. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.80%, with the tech index sliding 1.50%.

TOKYO — Asian stocks fell on Monday, with electronics heavyweights such as Samsung Electronics knocked lower by a slide in US tech shares and caution ahead of this week’s US Federal Reserve policy meeting.

Spreadbetters expected European shares to follow suit, forecasting lower openings for Britain’s FTSE, Germany’s DAX and France’s CAC.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.80%, with the tech index sliding 1.50%.

Technology stocks sold off sharply on Wall Street on Friday last week on concerns about Apple’s new iPhones and a cautious Goldman Sachs report about the stocks, prompting heavy profit taking after an extended rally.

Asia’s tech giants followed suit on Monday, with South Korea’s Samsung Electronics losing 1.80%, Taiwan Semiconductor Manufacturing Co. down 1.60% and Japan’s Sharp Corp. shedding 2.70%.

Japan’ s Nikkei was down 0.60% and South Korea’s KOSPI slid 1.20%. Hong Kong’s Hang Seng lost 1.30% while Shanghai fell 0.50%.

Electronics shipments have helped lead an export revival for many of Asia’s trade-reliant economies.

“The drop on Nasdaq appears to be taking a toll today. But the tech sector was strong and perhaps ready for profit taking, with the Fed meeting also approaching,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

“One day of losses on Wall Street does not change the broader picture but it has managed to dampen sentiment.”

The Fed will begin a two-day meeting ending on Wednesday at which it is widely expected to hike interest rates. The focus is on whether the Fed thinks the US economy is robust enough to withstand further rate increases through 2017 and how it plans to whittle down its massive balance sheet.

A rate hike accompanied by a message suggesting that the Fed may raise rates more than expected in 2017 would support the dollar but be negative for equity markets.

“Political events like the UK election and Comey’s testimony are over and the focus this week shifts to monetary policy,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. “The equity markets and the dollar have mostly priced in the Fed signaling three rate hikes in 2017. That explains why US equities have held up. But if the Fed hints at more than three hikes, that could trigger a sell-off in equities that many are bracing for.”

Oil extended gains after rising on Friday when a pipeline leak in major producer Nigeria overshadowed supply worries weighing on the market. US crude and Brent were both 0.60% higher at $46.10 and $48.45 a barrel, respectively.