Asian Equities Head Lower As Tech Stocks Sell Off

Asian equities are lower today led by a sell-off in technology stocks extending the decline for second day amid concerns follows news that the Biden administration may impose stricter trade curbs on companies supplying advanced chip technology to China. Tokyo Electron led the losses, falling as much as 11%, significantly impacting the MSCI Asia Pacific Index, while shares in Samsung and TSMC also saw notable declines. Australia reported employment data earlier, showing a jump in jobs, while the unemployment rate held steady.

• Japanese equities have faced significant declines this morning, driven primarily by heightened concerns over potential tighter US restrictions on semiconductor sales to China. Tokyo Electron saw a sharp drop of nearly 11%, marking its worst two-day loss since 2008. These declines mirrored the selloff in US and European semiconductor stocks, particularly following news that the Biden administration may impose severe trade restrictions on companies like Tokyo Electron and ASML Holding NV if they continue providing advanced chip technology to China. Additionally, broader concerns over a stronger yen, which has reached its highest levels since early June further pressured Japanese exporters, the Topix is trading 1.15% lower while the Nikkei 225 2.11% lower.
• South Korean equities have experienced declines this morning, heavily influenced by fears over the potential imposition of stricter US semiconductor sales restrictions to China. Currently the Kospi is 1.40% lower, while the Kosdaq trades 1.37% lower.
• The Taiwanese equity market has gapped lower this morning also driven by heightened concerns over the potential for stricter U.S. semiconductor sales restrictions to China. Comments from Trump have added to the uncertainty, while investors remain cautious ahead of TSMC’s earnings report due out later today, which is expected to provide further insights into the sector's outlook amid the current geopolitical climate, currently TSMC is 3.10% lower while the Taiex is down 2.10%.
• Australian equities are slightly lower today, with the ASX 200 down 0.30%. Earlier, Australia's labor market showed resilience with the economy adding 50.2k jobs vs 20k expected, the participation rate rose to 66.9% from 66.8% while the unemployment rate came in at 4.051% (4.1% rounded) with estimates of 4.1%.
• Elsewhere, New Zealand equities are little changed, Singapore equities are 0.65% lower, Malaysian equities are 0.10% lower, Philippines equities are 0.10% lower while Indonesian equities are 1% higher and Thailand equities are 0.35% higher.