Asia Tech Stocks Hammered After Nasdaq Slump

Asian technology stocks were hammered Thursday with the Hang Seng Tech Index slumping almost 4% as China’s tech giants led the region lower.

JD.com plunged 7.8%, Alibaba tumbled more than 6%, Baidu slid 5.2% and Meituan lost 2.7%. The sell-off followed Nasdaq’s 3% fall in New York overnight as worries over interest rate hikes intensified.

The Hang Seng Tech Index has dropped more than 30% this year and is down more than 11% in the past five days.

But the sell-off wasn’t confined to China. In Taiwan, semiconductor giant Taiwan Semiconductor Manufacturing Company lost more than 3% and Pegatron was down close to 1.2%.

In Japan Softbank, which reported a net loss of 1.7 trillion yen ($13.12 billion) for the year ended in March, plummeted more than 8%.

And in South Korea, digital lender Kakao Corp dropped by 5.5%, with the Kospi off by 1.63% at 2,550.08 points.

With investor worries deepening over inflation and higher interest rates, cryptocurrencies were dragged down, too. Bitcoin, which was near $40,000 a week ago, fell a further 8% in the morning to $26,570 before recovering to $27,621, down 4.7% down, late in the Asian afternoon.

End of `Free Money’

Headline US consumer prices rose 8.3% for the 12 months to April, slower than the 8.5% pace of a month earlier, but higher than market forecasts for 8.1%. Traders said it underscored concern that rates will rise quickly in response.

“We’re now very much embedded with at least two further (US) hikes of 50 basis points on the agenda,” said Damian Rooney, director of institutional sales at Argonaut in Perth. “For equity markets that really is the end of free money. “We probably were delusional six months ago with the rise of U.S. equities on hopes and prayers and the madness of the meme stocks, and suddenly we’re going a little bit back to what is reality.”

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2.3% to a 22-month low, while Japan’s Nikkei fell 1.8%.

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• Jim Pollard with Reuters.