Lower In Asia As Risk Sentiment Sours

Virtually all major Asia-Pac equity indices are lower at typing, bucking a strongly positive lead from Wall St. High-beta equities across the region broadly underperformed, tracking a similar decline in U.S. e-mini equity index futures, with defensive flows in the G10 FX space pointing to drag on sentiment towards richly-valued equities.

• The Nikkei 225 sits 0.3% worse off at typing after reversing opening gains, with the broader TOPIX Index posting a (marginally) more modest 0.1% decline. The move in the Nikkei effectively halts momentum from the +1.8% recovery seen on Tuesday, which had come after the steep sell-off in Japanese stocks through much of mid-June. Limited gains in large caps and export-related names such as Fast Retailing and Keyence Corp were unable to overcome losses in energy and material names, with financials posting a relatively flat performance as well.
• The Hang Seng Index trades 1.3% lower at typing after opening lower, shedding the bulk of Tuesday’s gains, and putting it on track to snap a three-day streak of gains in the process. China-based tech underperformed, dealing 2.5% weaker with gains in electric vehicle names (led by Li Auto after they had announced a new SUV model) unable to overcome broad losses observed in large-cap constituents such as the internet platform companies (JD.com: -5.1%, Meituan: -3.3%, Alibaba Group: -2.2%).
• The ASX200 trades 0.1% lower at writing after opening higher, slipping below neutral levels as gains in energy and utility names were countered by shallower losses observed across most other sub-indices. Tech names have lagged peers, seeing the S&P/ASX All Technology Index 0.9% worse off, while large-cap financials and the major miners are mostly flat to lower at typing.
• U.S. e-minis sit 0.9% to 1.0% worse off, operating around session lows at typing, with NASDAQ contracts narrowly leading losses.