Asia shares track tech-led decline on Wall Street
Oil prices inched higher after falling in the previous session, as traders bet that talks over a possible agreement to end the war in Ukraine could ease sanctions on Russian crude oil, boosting global supply.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.47 per cent as did stock futures in Europe and the US.
EUROSTOXX 50 futures slid 0.55 per cent, while DAX futures lost 0.5 per cent and FTSE futures eased 0.14 per cent.
S&P 500 futures dipped 0.2 per cent and Nasdaq futures lost 0.34 per cent, extending its fall from the cash session overnight.
"The S&P 500 and Nasdaq slumped overnight as investors ditched high-flying tech stocks with their lofty valuations," said Tony Sycamore, a market analyst at IG.
Adding to headwinds for the sector, news that Nvidia and AMD have agreed to give the US government 15 per cent of the revenues from chip sales in China, as well as reports that the U.S. is considering taking a 10 per cent stake in Intel, have stoked investor worries of the Trump administration's growing influence on tech companies.
Sources also told Reuters that US Commerce Secretary Howard Lutnick is looking into the federal government taking equity stakes in computer chip manufacturers that receive CHIPS Act funding to build factories in the country.
"These developments signal that US government is heading in a concerning and more interventionist direction," said Sycamore.
Other bourses in Asia were similarly in the red on Wednesday, with Japan's Nikkei down 1.2 per cent, while China's CSI300 blue-chip index fell 0.5 per cent.
Much of investors' attention at the start of the week was on a meeting between US President Donald Trump, Ukrainian President Volodymyr Zelenskiy and a group of European allies over the Russia-Ukraine war.
While the talks concluded without much fanfare, Trump said the United States would help guarantee Ukraine's security in any deal to end Russia's war there.
He later said on Tuesday that the United States might provide air support to Ukraine, while ruling out putting US troops on the ground.
"The US is not categorically underwriting anything, any security for Ukraine, even if they're open to provide some, because we don't know the conditions under which they will. So there's quite a bit of risk left out there," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.
Oil prices recovered after a fall in the previous session, with Brent crude futures last up 0.46 per cent at US$66.09 a barrel. US crude advanced 0.6 per cent to US$62.72 per barrel.
AWAITING JACKSON HOLE
All eyes are now on the Kansas City Federal Reserve's August 21-23 Jackson Hole symposium, where Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework on Friday.
Focus will be on what Powell says about the near-term outlook for rates, with traders almost fully pricing in a rate cut next month.
"Given the apparent tensions between U.S. CPI and PPI data, (it) does come across as... premature to declare one way or the other. And most importantly, given this kind of dilemma embedded within the data, it is hard to decipher whether the Fed would take or would emphasise the risks that start to mount on the job side of the equation or (the) need to sit firm," said Mizuho's Varathan.
Ahead of the gathering, the dollar firmed slightly, pushing the euro down 0.13 per cent to US$1.1633, while sterling fell 0.16 per cent to US$1.3470.
The New Zealand dollar eased 0.17 per cent to US$0.5885 ahead of a rate decision by the Reserve Bank of New Zealand due shortly on Wednesday, where a rate cut is expected.
Elsewhere, spot gold fell 0.07 per cent to US$3,312.89 an ounce.
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