Asian shares slip as investors look past upbeat tech earnings
TOKYO (Reuters) - Asian shares headed lower on Friday as profit-taking in Taiwanese chip giant TSMC, despite record profits, weighed on other tech firms and broader risk sentiment, while a more dovish US rates outlook kept bond yields near multi-month lows.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.35%, weighed by a 1.2% fall in Taiwanese shares after TSMC's earnings on Thursday.
TSMC, Asia's biggest firm by market capitalisation outside China, fell almost 4% following its earnings on Thursday.
While the world's largest contract chipmaker posted record quarterly sales and forecast higher revenue for the current quarter, investors took profits, fearing its best times could already be behind it.
TSMC's fall weighed on many other semiconductor related shares in the region, with South Korea's Kospi down 0.6% and Japan's Nikkei losing 1.1%.
Weakness in chip-related shares also helped to bring down the S&P 500 0.33% and the Nasdaq Composite 0.70% on Thursday.
While those indexes remained near record levels, supported by the prospects of an economic recovery, investors were turning wary on riskier, less liquid assets.
Investors instead flocked to bonds, after Federal Reserve Chair Jerome Powell reiterated that rising inflation is likely to be transitory and that the U.S. central bank would continue to support the economy.
Powell on Wednesday pledged "powerful support" to complete the US economic recovery from the coronavirus pandemic, a message he repeated on Thursday.
The 10-year U.S. Treasuries yield fell to 1.302% , edging near five-month low of 1.250% touched last week.
"Short positions in bonds simply don't work, so much so that you just lose vigour," said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank. "You can't fight the Fed when there is such a massive easing."
In foreign exchange, major currencies were little changed on the day but the dollar headed for its best weekly gain in about a month.
The euro changed hands at $1.1807 while the dollar traded at 110.03 yen .
Gold on the other hand hit a one-month high of $1,834.3 per ounce and last stood at $1,831.3, supported by a dovish Fed.
Oil prices stayed under pressure after a compromise deal between leading OPEC producers and a surprisingly poor weekly reading on U.S. fuel demand.
A deal has yet to be finalised and the UAE energy ministry said deliberations are continuing.
U.S. crude futures stood at $71.70 per barrel , near last week's low of $70.76. Brent futures traded at $73.54 per barrel .
