Asian shares subdued as tech blues offset U.S. tax cut hopes
Asian shares were subdued on Tuesday as investors` rotation out of technology shares took the toll on some of the region`s tech heavyweights although hopes of a major tax cut in the United States underpinned risk sentiment.
MSCI`s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> were capped by the fall in the region`s technology shares, with Samsung Electronics <005930.KS> losing 1.5 percent.
Japan`s Nikkei <.N225> fell 0.4 percent, with semiconductor-related shares such as Tokyo Electron <8035.T> and Shin-etsu Chemical <4063.T> leading the losses.
On Wall Street, the benchmark S&P 500 <.SPX> finished lower on Monday after setting a record intraday high earlier as the technology sector <.SPLRCT>, which has led Wall Street`s record-setting rally this year, tumbled 1.9 percent.
The tech index hit a five-week low and was down 4.3 percent from its record peak hit a week ago although it still remained the best performer of the year with year-to-date gains of 33 percent.
Investors switched to banks and retailers, which are seen benefiting from the expected corporate tax cuts.
President Donald Trump`s goal of slashing taxes on businesses cleared an important hurdle at weekend when the U.S. Senate narrowly approved the Republican`s tax overhaul plan.
The S&P 500 banks index <.SPXBK> surged 2.3 percent while battered department store shares also jumped.
"Some high-tech shares` valuations are getting stretched. For the entire market to keep rallying, we needed a sector rotation," said Nobuyuki Kashihara, head of research at Asset Management One.
"On the whole, the world`s shares are supported by a synchronized growth in the global economy," he added.
The tax cut hopes supported the U.S. dollar in the currency market, particularly against the yen.
The dollar fetched 112.48 yen
The British pound
Oil steadied after falling more than 1 percent on Monday on profit-taking as the market eyed signs of rising U.S. production.
But their prices remained close to recent two-year highs thanks to last week`s decision by OPEC and other producers to extend output cuts.
U.S. West Texas Intermediate futures
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)