Investing.com– Most Asian stocks fell on Wednesday, weighed by renewed losses in the technology sector as key overnight earnings in the U.S. underwhelmed, while sentiment towards China also showed few signs of improving.
Regional stocks took a weak lead-in from Wall Street, especially a fall in U.S. stock index futures following underwhelming earnings from heavyweights Tesla Inc (NASDAQ:) and Alphabet Inc (NASDAQ:).
This sparked extended selling in technology stocks, which came as the sector nursed steep losses through the past week. Profit-taking and a rotation into more economically sensitive sectors battered global tech valuations over the past year.
Asian tech lags after soft US earnings
Japan’s fell 0.5%, while South Korea’s shed 0.1%, as losses in tech stocks weighed.
Hong Kong’s index was among the worst performers for the day, losing 0.6% as major electric vehicle stocks fell in tandem with Tesla.
BYD (SZ:) Co Ltd (HK:), Li Auto (NASDAQ:) Inc (HK:) and Xpeng (NYSE:) Inc (HK:) slid between 2% and 4.3%, tracking a nearly 8% slide in Tesla after the firm’s second-quarter profit missed expectations.
Tesla was seen grappling with softening sales and mounting expenses as it diverted more resources towards artificial intelligence and self-driving technology.
Alphabet’s earnings also provided weak cues to Asian markets. While the internet giant did beat expectations with its earnings, slower growth in ad revenue and increased expenditure on AI heralded a similar trend for regional tech giants, who are due to report in the coming weeks. Alphabet’s shares fell 2% in aftermarket trade.
Chinese stocks hit 2-week low on economic, political jitters
China’s and indexes fell 0.8% and 0.6%, respectively, hitting an over two-week low.
Chinese markets saw an extended rout in recent sessions as sentiment towards the country soured in the wake of disappointing economic readings, especially data that showed slower-than-expected growth in the second quarter.
This was coupled with an underwhelming interest rate cut by the People’s Bank, while the Third Plenum of the Chinese Communist Party also yielded few cues on more stimulus measures.
Uncertainty over the U.S. presidential race also weighed on sentiment towards China, as investors speculated over just what a change in U.S. administration will entail for Washington’s stance towards the country.
Broader Asian markets moved in a flat-to-low range. Australia’s fell slightly as purchasing managers index data showed and activity in the country likely slowed in July.
Japan’s index fell 0.4%, with losses limited by some signs of improvement in the Japanese economy. While PMI data showed a contraction in activity, the rebounded sharply into expansion in July, buoying overall business activity.
Futures for India’s index fell 0.1%, with the index facing some weakness as investors balked at the increased capital gains taxes outlined in the government’s 2024 budget.
But overall, the budget appeared to be more geared towards reducing India’s fiscal deficit and reigning in government spending.
