Asian markets stumble as tech sell-off continues

Australia’s S&P/ASX 200 declined more than 3%. Hong Kong’s Hang Seng Index (HSI) tumbled as much as 2.1% in morning trade and was last down 1.5%. South Korea’s Kospi (KOSPI) lost 1.3%. Japan’s Nikkei 225 (N225) and China’s Shanghai Composite (SHCOMP) each fell 1.1%.
As in the United States, where the tech-heavy Nasdaq Composite (COMP) tumbled nearly 5%, tech stocks were the biggest losers in Asia.

The Hang Seng Tech Index — a new index tracking the 30 largest tech firms listed in Hong Kong — sank as much as 5.3% in the morning. It then pared losses and was down 1.8% in the afternoon. Alibaba, and semiconductor giant SMIC all lost at least 4%. (Tech stocks will soon become even more important for Hong Kong’s benchmark Hang Seng Index, which adds Alibaba and Xiaomi next week — a reflection of the growing number of Chinese tech firms trading in the city.)

Asian markets are “catching a cold” after the “US market sneezing” last night, Jingyi Pan, a market strategist for IG, wrote in a Friday research note.

US stocks recorded their worst day since June on Thursday as investors made a dash for the exits following a streak of record-setting days over the past several weeks. Along with the Nasdaq’s losses, the Dow Jones Industrial Average (INDU) fell more than 800 points to finish down 2.8%. The S&P 500 (SPX) fell fell 3.5%.

Futures for all three US indexes continued to trend lower in after-hours trading.

“Market corrections are to be expected,” said Kerry Craig, global market strategist for JP Morgan Asset Management, in a Friday research note. “A market fueled by central bank largesse, economic surprises and record earnings beats in the last few months was never going to maintain its heady pace forever.”

Hong Kong prepares for more public offerings

Despite Friday’s market turbulence, Asia has some good news to prepare for: Hong Kong is getting ready to embrace even more Chinese companies on its stock exchange.

Yum! China (YUMC)which operates the KFC, Taco Bell and Pizza Hut fast food chains in Chinais set to start trading in the city next week and has said it plans to raise as much as $2.5 billion. The company already trades in New York. (Reuters reported Friday, citing anonymous sources, that Yum! China has priced its shares and is expected to hit the $2.2 billion mark.)
The secondary listing may be another effort by a Chinese company to protect itself from worsening US-China relations. Other Chinese companies that trade in New York, including Alibaba (BABA), have also listed shares in Hong Kong recently.
That’s not the only public offering in the works. China water and beverage giant Nongfu Spring is expected to start trading in Hong Kong next week. And Ant Group, Alibaba’s financial affiliate, is gearing up for an IPO that could reportedly raise $30 billion — an amount that would make it the largest in history.

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