Asian stocks fell this week as investors sold shares trading at their most expensive valuations in five years on concerns that the economy and corporate profits will take longer than expected to recover.
Hitachi Ltd, Japan’s third-largest chipmaker, tumbled 17 percent after forecasting a loss. Rio Tinto Group, the world’s third-largest mining company, slumped 14 percent after London’s Telegraph newspaper reported the company may sell shares. China Construction Bank Ltd (中國建設銀行), the world’s No. 2 lender by market value, dropped 8.8 percent as Bank of America Corp sold a stake.
“All positive news has already been priced,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management Co, which oversees the equivalent of US$3.3 billion. “We need solid evidence the economy is indeed recovering to go up any further.”
The MSCI Asia-Pacific Index fell 0.7 percent to 97.28 in the past five days, ending a two-week, 9.5 percent advance. Speculation the global economy is recovering sent the gauge to the highest since Oct. 7 on Monday. The average valuation of its companies is 33 times trailing earnings, the highest level since 2004, according to data compiled by Bloomberg.
Cautious sentiment is expected to affect Taiwanese shares next week after today’s pro-independence protests against the China-friendly Chinese Nationalist Party (KMT) government, dealers said on Friday. Worries linger over a possible prolonged standoff and even violence as the Democratic Progressive Party also plans an all-night sit-in protest in front of the Presidential Office, they said.
“Political conflicts are the last thing the stock market wants to have,” Grand Cathay Securities Corp (大華證券) analyst Mars Hsu said.
Investors are also keeping a close eye on first-quarter GDP data scheduled for release on May 21, and waiting for government comments on the economic outlook for the rest of the year, they added.
The market is expected to face stiff technical barriers as it moves closer to 6,500-6,600 points next week, while ample liquidity may lend some support to prices at around 6,300, dealers said. In the week to Friday, the weighted index fell 94.78 points, or 1.44 percent, to 6,489.09 after a 9.86 percent increase the previous week.
Average daily turnover stood at NT$170.52 billion (US$5.18 billion), compared with NT$211.87 billion a week ago.
Hsu said the market’s recent significant gains have paved the way for volatility in the short term.
“Many investors may use such political factors as an excuse to cut positions for profit,” Hsu said.
Other markets on Friday:
KUALA LUMPUR: Up 0.2 percent. The Kuala Lumpur Composite Index gained 2.22 points to 1,014.21.
BANGKOK: The SET gained 7.37 points, or 1.4 percent, to 533.92.
MANILA: Up 1.97 percent. The composite index rose 44.47 points to 2,308.70.
WELLINGTON: Up 0.53 percent. The NZX-50 index rose 14.78 points to 2,790.90.
MUMBAI: Up 2.53 percent. The 30-share SENSEX gained 300.51 points to 12,173.42.
AIR DEFENSE: The Norwegian missile system has proved highly effective in Ukraine in its war against Russia, and the US has recommended it for Taiwan, an expert said The Norwegian Advanced Surface-to-Air Missile Systems (NASAMS) Taiwan ordered from the US would be installed in strategically important positions in Taipei and New Taipei City to guard the region, the Ministry of National Defense said in statement yesterday. The air defense system would be deployed in Taipei’s Songshan District (松山) and New Taipei City’s Tamsui District (淡水), the ministry said, adding that the systems could be delivered as soon as the end of this year. The US Defense Security Cooperation Agency has previously said that three NASAMS would be sold to Taiwan. The weapons are part of the 17th US arms sale to
SERIOUS ALLEGATIONS: The suspects formed spy networks and paramilitary groups to kill government officials during a possible Chinese invasion, prosecutors said Prosecutors have indicted seven retired military officers, members of the Rehabilitation Alliance Party, for allegedly obtaining funds from China, and forming paramilitary groups and assassination squads in Taiwan to collaborate with Chinese troops in a possible war. The suspects contravened the National Security Act (國家安全法) by taking photos and drawing maps of key radar stations, missile installations and the American Institute in Taiwan’s headquarters in Taipei, prosecutors said. They allegedly prepared to collaborate with China during a possible invasion of Taiwan, prosecutors said. Retired military officer Chu Hung-i (屈宏義), 62, a Republic of China Army Academy graduate, went to China
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
BREAKTHROUGH: The US is making chips on par in yield and quality with Taiwan, despite people saying that it could not happen, the official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has begun producing advanced 4-nanometer (nm) chips for US customers in Arizona, US Secretary of Commerce Gina Raimondo said, a milestone in the semiconductor efforts of the administration of US President Joe Biden. In November last year, the commerce department finalized a US$6.6 billion grant to TSMC’s US unit for semiconductor production in Phoenix, Arizona. “For the first time ever in our country’s history, we are making leading edge 4-nanometer chips on American soil, American workers — on par in yield and quality with Taiwan,” Raimondo said, adding that production had begun in recent
RSS