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Stock markets fell on Thursday as investors took profits from Asian technology shares and US central bank minutes highlighted uncertainty over the pace and timing of further interest rate cuts.
Hong Kong’s Hang Seng Tech index, a benchmark of China’s largest technology companies listed in the territory, was down as much as 3.6 per cent on Thursday before recovering to a 2.2 per cent decline.
Japan’s Topix fell 1.2 per cent, while the mainland Chinese CSI 300 retreated 0.4 per cent.
The falls partly reflected profit-taking after a rally in Chinese tech stocks on the back of advances by artificial intelligence start-up DeepSeek, said analysts.
The Hang Seng Tech index had advanced as much as 28 per cent year to date until Wednesday, far outpacing the US Nasdaq Composite’s 4 per cent gain.
“China is seeing big downs,” said Xin-Yao Ng, investment director for Asia-Pacific equities at Abrdn. “It’s mostly about profit-taking in tech. It’s been a very narrow tech rally and [we’re] now seeing some cautiousness.”
Analysts said tech investors were stepping back in advance of results from companies including Alibaba, JD.com and Trip.com.
“This week we have several big internet companies reporting results. Investors will be listening very closely to see management provide a bit more clarity on the AI vision,” said Jason Lui, head of Asia-Pacific equities and derivatives strategy at BNP Paribas.
The falls also came after the US Federal Reserve released minutes from its January rate-setting meeting in which officials said they wanted to see “further progress on inflation” before making more rate cuts.
US interest rates remaining higher for longer reduces the headroom for other central banks to lower rates to stimulate their economies. It also supports the dollar, thus sucking in capital from the rest of the world.
The S&P 500 index inched higher on Wednesday, closing up 0.2 per cent, while the Nasdaq Composite was flat.
The market drops in Asia also came amid concern over further export duties. Trump said on Tuesday he planned to levy tariffs on US imports of cars, semiconductors and pharmaceuticals.
“There is ongoing concern about tariffs [from President Trump] . . . and [rates] have been an overhang as the Asian central banks do not have room to cut rates,” said Ng of Abrdn.
The yen strengthened 0.6 per cent against the dollar, making it the best-performing major currency on Thursday.
The South Korean won and Singapore dollar also strengthened 0.3 per cent and 0.2 per cent, respectively, against the US currency.
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