Asian stocks on Friday posted their steepest slump in 10 months as Britain’s vote to leave the EU stunned investors, raising concern that a divided Europe would further damage global growth.
The MSCI Asia Pacific Index fell 3.7 percent to 125.23 on Friday in Hong Kong, as the UK voted to quit the EU after more than four decades in a rejection of the continent’s postwar political and economic order, prompting British Prime Minister David Cameron to resign and pressuring markets around the world.
“Fear is normally easier to profit from than greed. This is what we are seeing today,” said Ang Kok Heng, Kuala Lumpur-based chief investment officer at Phillip Capital Management Bhd.
The regional index was down by a milder 0.9 percent from 126.34 the previous week.
In Taipei, the TAIEX slid 2.3 percent to 8,476.99 on Friday, as investors scrambled to dump their holdings following the UK vote on Thursday, dealers said.
The weighted index was also down 1.1 percent from the previous week’s 8,568.08.
Selling was seen across the board, with large cap stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), and IC designer MediaTek Inc (聯發科), shedding 3.05 percent and 1.97 percent to NT$159 and NT$223.50 respectively, Taiwan Stock Exchange (TWSE) data showed.
Financial stocks also plunged, with Fubon Financial Holding Co (富邦金控) falling 4.02 percent to NT$38.20, and Cathay Financial Holding Co (國泰金控) dropping 3.32 percent to NT$36.40.
“Where the local main board will go will depend on whether foreign institutional investors will continue to sell aggressively,” Ta Ching Securities Co (大慶證券) analyst Andy Hsu (許博傑) said.
TWSE data showed that foreign institutional investors sold a net NT$13.04 billion in shares on the main board on Friday.
Japan’s TOPIX plunged 7.3 percent, the most in Asia. The gauge is already down 22 percent to date this year. Brexit fear has pummeled Japanese stocks more than other markets amid concern a vote to leave the EU could push investors into haven assets such as the yen. The currency soared past ¥100 per US dollar for the first time since November 2013. Morgan Stanley had warned that losses on the TOPIX would be bigger than elsewhere in Asia should Britain opt to leave the EU.
Toyota Motor Corp, Japan’s biggest company, plunged 8.7 percent in its worst day since the depths of the global financial crisis. Tata Motors Ltd tumbled 9.9 percent in Mumbai, dragging India’s S&P BSE SENSEX to the steepest drop since Feb. 11. Tata Motors, whose Jaguar Land Rover unit gets a quarter of its sales from Europe, was the SENSEX’s worst performer. Tata Steel Ltd, which has plants in the UK and the Netherlands, lost 9 percent.
The Hang Seng Index lost 2.9 percent, paring declines of as much as 5.8 percent. HSBC Holdings PLC, which gets a third of its revenues from Europe and has the second-biggest weighting on the Hong Kong stock gauge, sank 6.6 percent. South Korea’s KOSPI tumbled the most since May 2012 and Australia’s S&P/ASX 200 Index fell 3.2 percent. Volumes on Friday were at least 63 percent above average in Japan, Hong Kong and Australia.
Gauges of equity volatility across Asia surged. The HSI Volatility Index in Hong Kong rose 13 percent, while the Nikkei Stock Average Volatility Index climbed 17 percent. The KOSPI 200 Volatility Index gained 24 percent.
“I’m doing nothing. I’m paralyzed in fear, curled up fingers and toes like ina horror movie,” Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management Ltd, said by e-mail. “I was very confident it will be IN.”
Elsewhere in Asia, New Zealand’s S&P/NZX 50 Index slid 2.3 percent, Vietnamese shares fell 1.8 percent, and equity gauges in Indonesia, Thailand and the Philippines dropped at least 1.3 percent.
Additional reporting by staff writer, with CNA
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
RIDING AI WAVE: : Most of its NT$15bn capital budget would be spent on packaging technologies used in AI and HPC chips and advanced testing technology, it said Chip testing and packaging service provider Powertech Technology Inc (PTI, 力成科技) plans to increase this year’s capital expenditure by 50 percent to expand capacity to meet growing demand for advanced memorychips used in artificial intelligence (AI) products. The company proposed to spend NT$15 billion (US$460.94 million) to expand advanced capacity and equipment, compared with a budget of NT$10 billion it planned three months ago. “We are seeing a recovery in market demand as well as new business opportunities. We will spend heavily on advanced packaging” equipment, Powertech chief executive officer Boris Hsieh (謝永達) told investors on Tuesday. “We will focus on ramping
INFLATION WATCH: A rate hike in March would help keep inflation at 2.16 percent this year, although a weak currency and higher electricity rates are an issue, S&P said Moody’s Ratings and S&P Global Ratings have reaffirmed Taiwan’s sovereign credit ratings at “As3” and “AA+” respectively with a stable outlook on the back of high income and wealth levels, a strong institutional framework and robust external positions. The affirmations came as Taiwan’s economy is gaining momentum after quarters of slowdown induced by stubborn global inflation and monetary tightening. Taiwan’s strong fiscal and external buffers have improved relative to peers as evidenced by recent shocks linked to the COVID-19 pandemic and the ongoing US-China technology dispute, the two ratings firms said. “Taiwan stands as the epicenter of the global semiconductor supply chain, accounting