Hong Kong and Taiwan markets drop more than 2% as Asian tech stocks tumble

SINGAPORE — Stocks in Asia-Pacific edged lower on Thursday as tech stocks sold off overnight losses on Wall Street, after data showed the U.S. consumer price index in April hovered near the highest level in more than 40 years.

In Hong Kong, the Hang Seng Tech Index fell 3.84% to 3,864.95. Alibaba shares fell 6.6%, while Meituan lost 2.73%. JD.com also saw its Hong Kong-listed shares fall 7.78%.

Technology stocks in Taiwan also saw losses, with shares in Taiwan Semiconductor Manufacturing Company falling 3.07% while Pegatron fell 1.17%.

Shares of the Japanese conglomerate SoftBank Group plunged 8.03%. In South Korea, Kakao shares fell 5.5% while Krafton lost 1.95%.

In broader markets, Hong Kong’s Hang Seng Index fell 2.24% to close at 19,380.34, while Taiwan’s Taiex declined 2.43% on the day to 15,616.68.

Mainland Chinese stocks posted earlier gains, with the Shanghai Composite closing 0.12% lower at 3,054.99 and the Shenzhen Component falling 0.132% to 11,094.87.

“We’re not very… bearish on China equities at the moment,” Selina Sia, head of China equity research at Credit Suisse Wealth Management, told CNBC’s “Street Signs Asia” on Thursday.

“We have seen that the cases in Shanghai have already peaked and hopefully omicron can be brought under control sooner rather than later, but we are seeing positive signs there,” Sia said. “Furthermore, policymakers made statements after the Politburo meeting in late April to support investment in infrastructure, platform economies and also the real estate market.”

Japan’s Nikkei 225 fell 1.77% to close at 25,748.72, while the Topix index fell 1.19% to 1,829.18.

In South Korea, the Kospi closed down 1.63% at 2,550.08. Australian stocks also fell as the S&P/ASX 200 fell 1.75% to end its trading day at 6,941.

MSCI’s broader index of Asia-Pacific stocks outside of Japan fell 2.48%.

“We think that in the equity space, Europe and the US face more central bank tightening and growth headwinds than possibly Japan and Asia,” said Gareth Nicholson, chief investment officer for the management of Nomura international heritage. “Asia has China supporting them, Japan has a very dovish central bank.”

“Also, from a valuation perspective, we think there’s more upside to this part of the world in equities than the other side,” Nicholson told CNBC’s “Squawk Box Asia” on Thursday.

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The US consumer price index rose 8.3% in April compared to a year earlier, near the highest level in more than 40 years, official data showed on Wednesday. The April reading, which represented a slight decline from the March high, was also above the Dow Jones estimate with a gain of 8.1%.

Wall Street stocks fell on the release of US consumer inflation data. The tech-heavy Nasdaq Composite lagged as it fell 3.18% to 11,364.24, while the broader S&P 500 it lost 1.65% to 3,935.18. The Dow Jones Industrial Average decreased 326.63 points, or 1.02%, to 31,834.11.

Bitcoin drops below $28,000

The bitcoin price briefly dipped below $27,000 for the first time since December 2020, continuing a recent sell-off in the cryptocurrency space amid heightened risk aversion among investors. It later recovered from some of those losses and was trading at $27,851.44 as of 4:15 a.m. ET on Thursday, according to data from Coin Metrics.

The US Dollar Index, which tracks the greenback against a basket of its peers, was at 104.313 as it continues to hold above the 103.8 level below which it dipped at points earlier this week.

The Japanese yen traded at 128.59 per dollar, stronger compared to levels above 130.5 seen against the dollar earlier this week. The Australian dollar was at $0.6881 after a recent drop from levels above $0.70.

Oil prices were lower during afternoon Asian trading hours, with international benchmark Brent crude futures down 1.74% at $105.64 a barrel. US crude futures slumped 2.02% to $103.57 a barrel.

— CNBC’s Jeff Cox contributed to this report.

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