Asia report: Tech shares lead stocks weaker

Most markets in the Asia-Pacific region were on the back foot at the close on Friday, giving back some of Thursday’s gains amid warnings that high inflation was set to linger.

In Japan, the Nikkei 225 was down 2.05% at 25,162.78, as the yen weakened 0.61% against the dollar to last trade at JPY 116.85.

Among the benchmark’s major components, automation specialist Fanuc was down 1.25%, fashion firm Fast Retailing lost 2.25%, and technology conglomerate SoftBank Group tumbled 6.21%.

Fast Retailing was in the headlines after the owner of the Uniqlo clothing brand reversed its stance on Russia, confirming it would now close all of its retail outlets in the country in response to the invasion of Ukraine.

Chief executive officer Tadashi Yanai told the Nikkei earlier in the week that even though the company was against the invasion, clothing remained a life necessity.

“The people of Russia have the same right to live as we do,” he said, according to Bloomberg.

The broader Topix index was off 1.67% by the end of trading in Tokyo, closing at 1,799.54.

Markets on the mainland went against the regional trend, with the Shanghai Composite adding 0.41% to 3,309.75, and the smaller, technology-heavy Shenzhen Composite 0.56% firmer at 2,173.14.

South Korea’s Kospi was off 0.71% at 2,661.28, while the Hang Seng Index in Hong Kong lost 1.61% to 20,553.79.

Chinese technology plays led the losses in the special administrative region, with Alibaba Group down 5.52%, Meituan losing 6.1%, and Tencent Holdings 4.47% weaker.

The blue-chip technology stocks were on the back foot in Seoul as well, with Samsung Electronics down 1.69% and SK Hynix 2.5% lower.

The losses in Asia came after a negative session on Wall Street overnight, in which sentiment was dented by another red-hot inflation report showing a 7.9% rise in US consumer prices over the last year.

Following that, Treasury secretary Janet Yellen warned Americans that another year of “very uncomfortably high” inflation was on the way, as a result of Russia’s ongoing, unprovoked invasion of Ukraine.

“Yesterday’s US CPI number for February saw headline inflation rise to a new 40-year high of 7.9%, more or less rubber stamping a rate hike from the Federal Reserve for next week,” said CMC Markets chief market analyst Michael Hewson.

“At around the same time the European Central Bank adopted a more hawkish policy stance than was expected when it announced that it would be tapering its asset purchase program steadily over the summer, with a view to ending it in the third quarter.

“This move appears to open the central bank’s options with respect to potentially raising rates by the end of this year, although it doesn’t lock them into doing so.”

Oil prices were creeping higher again as the region entered the weekend, with Brent crude last up 3.86% at $113.55 per barrel, and West Texas Intermediate ahead 3.58% to $109.82.

In Australia, the S&P/ASX 200 was 0.94% lower at 7,063.60, while across the Tasman Sea, the S&P/NZX 50 was 0.88% weaker at 11,821.38.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.43% at AUD 1.3648, and the Kiwi retreating 0.14% to NZD 1.4588.