Asia report: Markets mixed amid global tech sell-off

(Sharecast News) - Asia-Pacific markets closed mixed on Thursday as investors awaited key US employment data that could influence the Federal Reserve's next monetary policy decisions, while technology shares came under renewed pressure across the region.

"Highly leveraged Asian AI investors are getting anxious; Korea is cracking, the yen is whispering intervention, oil is losing its war premium, and payrolls are the last real hurdle before the holiday tape takes over," said Patrick Munnelly, market strategy partner at TickMill.

"The market is not abandoning the AI story, but it is finally testing the price paid for it."

Wall Street was looking ahead to the June jobs report, due at 0830 EDT (1330 BST).

Economists polled by Dow Jones expect the US economy to have added 115,000 jobs last month.

Munnelly said investors still had to navigate the employment report before markets thinned out for the US Independence Day holiday.

"Consensus expects headline payroll gains of 113,000, but the composition will matter more than the top-line number," he said.

"Wednesday's ADP release again suggested that job creation may be heavily concentrated in health and education, with many other sectors showing limited hiring momentum."

Munnelly said the key issue was whether the report confirmed genuine labour-market strength or exposed a narrow, uneven jobs engine with more slack than the unemployment rate suggested.

Oil prices fell as investors weighed signs of progress in indirect negotiations between Washington and Tehran, easing concerns over potential disruption to Middle East crude supplies.

Brent crude futures were last down 0.84% on ICE at $70.97 per barrel, while the NYMEX quote for West Texas Intermediate fell 0.82% to $68.02.

Brent has fallen nearly 40% this quarter, marking its worst quarterly performance since 2020, according to LSEG data.

The decline also came after US president Donald Trump said negotiations with Iran in Qatar were "going well".

"The denuclearization of Iran is moving along well," Trump said.

"They've had very good meetings and we'll see."

Tech stocks lead losses on mixed day for Asia

Japan's Nikkei 225 fell 2.47% to 68,733.15, while the broader Topix edged up 0.09% to 4,014.98.

Kioxia Holdings dropped 13.47% amid broad losses in Asian technology stocks after profit-taking in US markets.

The semiconductor manufacturer recently said it planned to offer US depositary receipts between April and June 2027, amid growing demand for storage systems tied to artificial intelligence products.

Mitsui Kinzoku lost 11.38%, while Taiyo Yuden declined 9.95%.

In China, the Shanghai Composite fell 2.03% to 4,028.90, while the Shenzhen Component dropped 3.85% to 15,498.81.

Guangzhou Fangbang Electronics declined 14.88%, Montage Technology lost 14.58%, and Suzhou TZTEK Technology fell 11.27%.

Hong Kong's Hang Seng Index rose 0.76% to 23,055.03.

CSPC Pharmaceutical Group gained 8.32%, BYD climbed 8.07%, and Innovent Biologics added 7.22%.

Hong Kong-listed Chinese electric vehicle makers advanced after June delivery figures supported sentiment.

Xiaomi reported a third consecutive month of more than 30,000 deliveries, while BYD posted June vehicle sales of 403,472 units, up 5.46% from 382,585 a year earlier.

South Korea's Kospi 100 plunged 8.88% to 9,563.63 as technology shares slumped after the Nasdaq Composite fell overnight.

SK Hynix dropped 14.57%, SK Square lost 13.2%, and Samsung Electro-Mechanics declined 12.65%.

Samsung Electronics also tumbled as Asia's largest chipmakers bore the brunt of the global technology sell-off, following sharp losses in Micron Technology and Sandisk on Wall Street.

Hanwha Ocean bucked the trend, rising 1.16% after being selected as the preferred bidder for South Korea's KDDX destroyer programme.

The KDDX programme was reported by Chosun Ilbo to be a KRW 7.8trn initiative to build six destroyers for the South Korean navy.

Munnelly said tech had led Asia lower as the semiconductor complex came under renewed pressure, raising fresh questions over whether this year's AI-driven equity surge had run too far, too fast.

"The epicentre was exactly where the year's momentum has been strongest: AI-linked chipmakers," he said.

"Samsung Electronics and SK Hynix both fell more than 6%, while Japan's Kioxia slumped 13%, a brutal reversal for a stock that had already risen more than 650% this year.

"That kind of price action does not kill the AI capex story, but it does expose how fragile the positioning has become," Munnelly added.

"Semiconductors have been treated as the cleanest listed expression of the data-centre buildout, and memory names have carried the highest-beta version of that trade in Asia."

He said the market was no longer debating whether AI mattered, but whether the earnings path could keep justifying the multiple.

South Korea's inflation rate rose to 3.2% in June, its highest level since December 2023 and in line with expectations from Reuters-polled economists.

It was the fourth consecutive month of accelerating inflation, strengthening the case for a Bank of Korea rate hike at its next meeting on 16 July.

Sydney manages gains, Wellington in the red

Australia's S&P/ASX 200 edged up 0.02% to 8,724.50.

Objective Corporation rebounded 15.56%, Northern Star Resources rose 5.48%, and News Corporation gained 4.29%.

Australia unexpectedly posted a trade deficit of AUD 3.02bn in May, swinging from a downwardly revised AUD 1.38bn surplus in April and defying expectations for an AUD 2.2bn surplus.

It was the country's second trade deficit this year and the largest since December 2015, as exports fell and imports rose.

Exports dropped 6.9% month on month to a four-month low of AUD 43.61bn, reversing a 7.2% increase in April, while imports rose 2.6% to AUD 45.46bn, reflecting stronger domestic demand.

New Zealand's S&P/NZX 50 fell 0.21% to 13,582.19.

Spark New Zealand dropped 3.65%, Vista Group International lost 2.95%, and Serko declined 2.68%.

Dollar weaker against G10 peers

In currencies, the dollar was last down 0.93% on the yen to trade at JPY 161.06, as it declined 0.23% against the Aussie to AUD 1.4473, and slipped 0.37% on the Kiwi to change hands at NZD 1.7564.

Reporting by Josh White for Sharecast.com.