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Asian equities wobble amid selloff in Chinese tech shares

Asian equities

Alibaba Group Holding Ltd, Xiaomi Corp, and Tencent Holdings all traded lower

Asian equities wobbled between gains and losses on Thursday as a selloff in Chinese technology shares amid concerns they will be de-listed from U.S. bourses and worries about a semiconductor shortage rattled some investors.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1%.

Hong Kong shares dropped steeply at the open but then trimmed their losses to a 0.18% decline. Alibaba Group Holding Ltd, Xiaomi Corp, and Tencent Holdings all traded lower.

Shares in China advanced 0.08%.

Elsewhere, Japanese stocks gained 0.71% and Australian shares added 0.24% as bargain hunters bought shares of consumer goods, real estate, and financial firms.

U.S. stock futures advanced 0.25%.

The U.S. securities regulator is rolling out measures that would remove foreign companies off U.S. stock exchanges if they do not comply with U.S. auditing standards and require them to disclose any government affiliations, which is widely expected to target Chinese companies.

Moreover, worries about extended economic lockdowns in Europe, disruptions to the distribution of coronavirus vaccinations and potential U.S. tax hikes also weighed on investor sentiment.

Rising interest rates, uncertainty of tax policy, concern over inflation all remain top of mind for investors. However, none of these themes speak to rising appetite for risk, said Peter Kenny of Kenny’s Commentary LLC and Strategic Board Solutions LLC in Denver.

We are seeing last year’s big gains underperform the broader market, he said.

On Wall Street, the Dow Jones Industrial Average shed 0.01%, the Nasdaq Composite fell 2.01%, while the S&P 500 declined 0.55% as optimistic comments by U.S. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen failed to ease profit-taking in the tech sector.

MSCI’s gauge of stocks across the globe gained 0.07%.

U.S. crude dropped 1.45% to $60.29 per barrel, and Brent shed 1.21% to $63.64 a barrel, giving back some of the previous day’s gains made after one of the world’s largest container ships ran aground in the Suez Canal, blocking a vital shipping lane.

Benchmark 10-year U.S. Treasury yields advanced to 1.6330% in Asian trade, supported by positive data on the U.S. manufacturing sector.

Investors have focused on the 10-year Treasury yield, pondering if there is room for long-term interest rates to run, said David Kelly, chief global strategist at JPMorgan Asset Management.

We know that the economy is primed to begin to really accelerate in the second quarter, Kelly said. But we haven’t seen that acceleration yet so that’s what we’re waiting for.

The dollar hit a fresh four-month high of $1.1804 per euro on Thursday as extended lockdowns and worries about the pace of vaccinations across Europe hit the common currency.

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