Global Stocks Dip: Tech Worries Hit Wall St, Japan Falls - AP News

Tokyo, Jul 18 (AP) Global shares were mostly lower Thursday, with Tokyo's benchmark dipping more than 2 per cent, after Wall Street's record-breaking rally slammed into a wall of worries over potentially worsening trade tensions with China.

France's CAC 40 inched down less than 0.1 per cent in early trading to 7,568.18. Germany's DAX dipped nearly 0.2 per cent to 18,407.74. Britain's FTSE 100 added 0.7 per cent to 8,243.50. US shares were set to be mixed with Dow futures falling nearly 0.1 per cent to 41,469.00, while S&P 500 futures rose nearly 0.2 per cent to 5,648.25.

Japan's Nikkei 225 index finished down 2.4 per cent at 40,126.35.

The markets' spotlight was squarely on chip companies after a report from Bloomberg News said US President Joe Biden is considering the most severe trade restrictions available if companies like the Netherlands' ASML and Japan's Tokyo Electron continue to ship advanced semiconductor technology to China.

The US government has blocked Chinese access to advanced chips and the equipment to make them, citing security concerns, and urged its allies to follow suit.

Tech-related shares weighed on Tokyo trading. Tokyo Electron's shares plunged 8.8 per cent and chip equipment maker Advantest's shares sank 4.9 per cent. Lasertec Corp. fell 6.3 per cent.

The strengthening yen also added to worries about exporter shares in Japan, as a weak yen is a boon for the nation's giant exporters like Toyota Motor Corp.

The US dollar rose to 156.28 Japanese yen from 156.19 yen. It was trading above 161 yen most of last week but had fallen in recent sessions. The euro cost USD 1.0936, inching down from USD 1.0941.

The recent currency fluctuations are a result of US politics taking “centre stage,” according to Tan Jing Yi of Mizuho Bank. Former US President Donald Trump has been expressing concerns about an overly strong dollar as a disadvantage for the US since it makes American-made products relatively more expensive in overseas markets.

Japan posted a trade surplus in June, the first in three months, highlighting a recovery in exports, according to Finance Ministry data. For the first six months of this year, Japan's trade deficit declined by more than half from the same period last year, to 3.23 trillion yen (USD 21 billion).

Elsewhere in Asia, Hong Kong's Hang Seng gained 0.2 per cent to 17,778.41. The Shanghai Composite index edged 0.5 per cent higher to 2,977.13.

Investors are awaiting word on policies to help rev up China's slowing economy as a top-level meeting of the ruling Communist Party wraps up in Beijing on Thursday.

Australia's S&P/ASX 200 fell 0.3 per cent to 8,036.50. South Korea's Kospi declined 0.7 per cent to 2,824.35.

Taiwan's Taiex lost 1.6 per cent as giant chip maker TSMC sank 2.4 per cent after losing 8 per cent overnight in US trading.

Apart from concerns over further controls over sales of chips and equipment to China, Taiwan shares fell after Trump criticised the self-governed island claimed by Beijing, to which the US is obligated by law to provide defensive weapons.

“Taiwan should pay us for defense,” Trump said according to a transcript of an interview published by Bloomberg. “Taiwan took our chip business from us, I mean, how stupid are we?” he said.

In energy trading, benchmark US crude rose 82 cents to USD 83.67 a barrel. Brent crude, the international standard, gained 61 cents to USD 85.69 a barrel.