Asian equities fall on tech profit-taking

With losses cantered on Taiwan and China following remarks made by U.S. Republican presidential candidate Donald Trump that Taiwan should foot the bill for American defence, the majority of Asian markets saw a decline on Wednesday.

Nevertheless, Wall Street provided a solid lead-in, causing the DJI to jump over 2% to all-time highs as traders moved away from technology and into more economically sensitive sectors amid expectations of lower interest rates.

In an interview with Bloomberg Businessweek, Trump stated that, given Taiwan's lack of contributions to the United States, he thought Taiwan had to reimburse the United States for providing the island with defence supplies.

I have a tremendous deal of respect for the folks I know. Indeed, they acquired nearly all of our semiconductor business. In the interview, Trump stated, "I think Taiwan should pay us for defence," and claimed that the United States was just like an insurance company.

China's demands for Taiwan's reunification with the mainland have made relations between the two countries delicate subjects. The United States is the island's largest defence provider, yet the two countries do not have a formal diplomatic relationship.

Given that the previous president has continued to use harsh rhetoric against China, worries about a Trump presidency have also shook Chinese markets in recent sessions. In the latter part of the 2010s, his government provoked a trade war with Beijing.

A range of unfavourable economic data from the nation was also causing losses for Chinese markets.

On Wednesday, flows into more economically sensitive sectors were driven by anticipation of interest rate reduction, which caused Asian tech equities, especially chipmakers, to decline.

Important chipmakers ASML and TSMC, who report profits on Wednesday and Thursday, respectively, were also jittery ahead of their sector's crucial reports this week.

Both are regarded as drivers of chip demand, which surged dramatically in the previous year due to growing interest in artificial intelligence.

(Sources: investing.com, reuters.com)