Asian shares steady after tech stocks slump on Wall Street
TOKYO (AP) — Shares were steady in Asia on Tuesday after a lackluster session on Wall Street where technology stocks tumbled. Investors are keeping an eye on U.S. tax legislation and Brexit negotiations.
KEEPING SCORE: Tokyo's Nikkei 225 index slipped 0.3 percent to 22,635.22 and Hong Kong's Hang Seng index dropped 0.3 percent to 29,051.63. The Kospi in South Korea gained 0.2 percent to 2,506.55 while the Shanghai Composite index added 0.1 percent to 3,311.59. Australia's S&P ASX 200 fell 0.2 percent to 5,971.30. Shares in Southeast Asia were mostly higher. Taiwan declined.
WALL STREET: Telecom stocks, banks and other sectors that stand to benefit the most from Washington's drive to cut corporate tax rates jumped, but technology stocks slumped, giving up a chunk of the gains that made them the best-performing part of the market by far this year. Losers and gainers were nearly evenly split. The S&P 500 dipped 0.1 percent to 2,639.44, while the Dow Jones industrial average rose 0.2 percent to 24,290.05. The tech-heavy Nasdaq composite fell 1.1 percent, to 6,775.37.
U.S. TAXES: Indexes initially jumped on expectations that lower tax rates will boost corporate profits. But technology companies that already pay the lowest effective tax rates of the 11 sectors in the S&P 500 skidded. Uncertainty over the tax overhaul persists since the Senate and House of Representatives must iron out differences in their respective proposals, with a Friday deadline to avert a government shutdown looming.
BREXIT TALKS: The European Union and Britain ended a flurry of top-level diplomacy on Monday without a deal on the terms of their divorce, as agreement on how to maintain an open Irish border after Brexit slipped out of the negotiators' grasp. But the two sides said they were within striking distance of consensus, setting up a hectic negotiating rush ahead of an EU summit next week.
ANALYST VIEWPOINT: "The two overarching macro themes the market honed in on overnight have been the response from European and U.S. traders to the Senate passing its tax plan and that no deal has yet been formally reached in the Brexit negotiations," Chris Weston of IG said in a commentary. "What we have seen though is a fairly upbeat session, but perhaps not as strong as we had anticipated."
CURRENCIES: The dollar rose to 112.51 Japanese yen from 112.41 yen late Monday. The euro climbed to $1.1877 from $1.1866, and the British pound fell $1.3472 from $1.3479.
ENERGY: Benchmark U.S. crude gained 12 cents to $57.59 per barrel in electronic trading on the New York Mercantile Exchange. It slumped 89 cents to settle at $57.47 per barrel on Monday. Brent crude, the international standard, picked up 8 cents to $62.53 per barrel. It fell $1.28 to $62.45 a barrel in London.