FX.co ★ Asian Shares Decline On Big Tech Selloff

Asian stocks experienced a significant decline on Thursday, primarily driven by heavy selling pressure in the technology sector due to escalating trade tensions between China and the United States.

Reports indicated that the U.S. government is considering stricter restrictions on exports of advanced semiconductor technology to China. Compounding this, controversial remarks by Republican presidential nominee Donald Trump suggested that Taiwan should compensate the U.S. for defense support.

The U.S. dollar hovered near a four-month low in Asian trading, as the Japanese yen reached a six-week high, raising speculation about possible official intervention.

Gold approached record highs amidst speculation of a potential U.S. rate cut, while oil prices extended gains from the previous session following a decrease in U.S. crude inventories.

China's Shanghai Composite Index increased by 0.48% to 2,977.13, and Hong Kong's Hang Seng Index inched up by 0.22% to 17,778.41. This movement occurred as China's ruling Communist Party concluded a high-level meeting, with investors anticipating growth-stimulating policies.

In Japan, markets saw a sharp decline due to a tech sector sell-off. Additionally, the yen's appreciation against the dollar negatively affected export-focused companies. The Nikkei Average plummeted by 2.36% to 40,126.35, and the broader Topix Index fell by 1.60% to 2,868.63. Tokyo Electron, a supplier of advanced semiconductor technology to China, dropped by 8.8%, while Screen Holdings, Advantest, and SoftBank Group decreased by 8.4%, 4.9%, and 6.1%, respectively. This downturn occurred despite data showing Japan achieved a trade surplus in June for the first time in three months.

South Korean stocks also closed lower, with the Kospi Average falling 0.67% to 2,824.35, chiefly driven by losses in the tech sector. Shares of SK Hynix decreased by 3.6%, and Hyundai Motor fell by 3%, while Samsung Heavy Industries saw a 1.3% rise.

In Australia, markets retreated from record highs reached in the previous session, following data showing a significant employment increase in June, sparking concerns about potential rate hikes. The benchmark S&P/ASX 200 index fell by 0.27% to 8,036.50, with banks and tech stocks leading the declines. The broader All Ordinaries index decreased by 0.37% to 8,272.70. Domino's Pizza Enterprises sharply declined by 8.2% after issuing a weak store growth forecast.

Meanwhile, New Zealand's benchmark S&P/NZX-50 index rose by 0.30% to 12,329.44.

U.S. stocks had a mixed closing in the previous session as chipmakers and large-cap companies witnessed declines due to valuation concerns. Economic data revealed that housing starts and building permits saw a recovery in June. Although U.S. industrial production cooled in the month, it still surpassed analyst expectations. The tech-heavy Nasdaq Composite fell by 2.8% on speculation of stricter regulations affecting China's chip industry and Trump's comments on Taiwan. The S&P 500 decreased by 1.4%, while the Dow Jones Industrial Average rose by 0.6%.