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Wild Ride for Asia Tech Stock Investors Unlikely to End Soon

Divya Balji
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Wild Ride for Asia Tech Stock Investors Unlikely to End Soon

(Bloomberg) -- Investors in Asia tech stocks have needed a strong stomach to deal with this year’s ups and downs. And it isn’t getting any better.The trade conflict between the U.S. and China, concerns surrounding Huawei Technologies Co. and the back-and-forth on whether the demand for memory chips will revive has sent volatility soaring 300% on the MSCI Asia Pacific Information Technology sector since its May low. That level is now the greatest among all sectors in Asia and the highest since April 3.Last week, tech stocks were pummeled after an analyst warned that the recovery in demand for memory chips may not pick up until the second half of next year. The slump continued after Broadcom Inc. slashed its full-year revenue forecast amid escalating trade tensions.And now, stocks are moving in the opposite direction, making investments in the sector a tumultuous ride. Confirmation on Tuesday of the U.S. and China’s plans to meet in Japan next week to relaunch trade talks has pushed the tech gauge to its highest level in more than a month. In turn, the regional benchmark MSCI Asia Pacific Index soared 1.6%.Trump’s comments on the U.S.-China summit are bolstering the chips sector, said Soichiro Tsutsumi, a trader with eWarrant Japan Securities. “Whether the U.S. and China come to an agreement or not is big focus for the sector.”\--With assistance from Min Jeong Lee.To contact the reporter on this story: Divya Balji in Singapore at dbalji1@bloomberg.netTo contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net, Joanna Ossinger, Min Jeong LeeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

(Bloomberg) -- Investors in Asia tech stocks have needed a strong stomach to deal with this year’s ups and downs. And it isn’t getting any better.

The trade conflict between the U.S. and China, concerns surrounding Huawei Technologies Co. and the back-and-forth on whether the demand for memory chips will revive has sent volatility soaring 300% on the MSCI Asia Pacific Information Technology sector since its May low. That level is now the greatest among all sectors in Asia and the highest since April 3.

Last week, tech stocks were pummeled after an analyst warned that the recovery in demand for memory chips may not pick up until the second half of next year. The slump continued after Broadcom Inc. slashed its full-year revenue forecast amid escalating trade tensions.

And now, stocks are moving in the opposite direction, making investments in the sector a tumultuous ride. Confirmation on Tuesday of the U.S. and China’s plans to meet in Japan next week to relaunch trade talks has pushed the tech gauge to its highest level in more than a month. In turn, the regional benchmark MSCI Asia Pacific Index soared 1.6%.

Trump’s comments on the U.S.-China summit are bolstering the chips sector, said Soichiro Tsutsumi, a trader with eWarrant Japan Securities. “Whether the U.S. and China come to an agreement or not is big focus for the sector.”

--With assistance from Min Jeong Lee.

To contact the reporter on this story: Divya Balji in Singapore at dbalji1@bloomberg.net

To contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net, Joanna Ossinger, Min Jeong Lee

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.