Asian stocks bounced from one-month lows as Taiwan ended a five-day losing streak, led by semiconductor shares following Wall Street's recovery.
Asian stocks bounced from one-month lows on Tuesday, with Taiwan's market snapping a five-day losing streak as semiconductor shares took a lead from a Wall Street recovery.
Asian Tech Stocks Plunge Amid Profit-Taking and Trade Worries
Asian technology stocks saw their worst selloff since the early days of the pandemic on Monday after Morgan Stanley strategists recommended investors book profits from the AI boom.
The brokerage lowered its view on the sector first since it raised that to overweight in October 2022. The shares have been in a downturn on fears that Trump's return may result in tougher trade restrictions on semiconductors.
The Nikkei 225 has taken a nosedive since 11 July when it hit another record peak above 41,000. Still the benchmark index was up around 20% year to date as a weaker yen has boosted exports.
But the yen’s continuous slide has weighed on the economy. Japan's government cut its growth forecast to grow 0.9% for the current fiscal year, driven by a consumption slowdown because of the rising import costs.
Growing concerns about overheated chip stocks now add to the downside risks as the whopping rally in Japan’s stock market this year was partly driven by the listed companies in the business.
The Nikkei 225 remained above its 50 SMA despite the recent correction, so it is premature to predict a trend reversal. A dip below the support could expose 39,000.
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