Asian equities fall following weaker US tech earnings

Wednesday saw a decline in most Asian markets due to further losses in the technology sector and weak overnight earnings in the United States. At the same time, mood towards China did not appear to be improving.

Wall Street gave regional markets a poor lead-in, particularly after U.S. stock index futures declined in response to disappointing results from tech giants Tesla and Alphabet.

This led to prolonged selling in technology equities, which occurred throughout the previous week as the industry was suffering severe losses. Over the last year, profit-taking and a shift towards more economically sensitive industries have hammered global IT prices.

Losses in tech stocks caused South Korea's KOSPI to drop 0.1% and Japan's Nikkei 225 to drop 0.5%.

The Hang Seng index in Hong Kong was one of the worst performers of the day, falling 0.6% as key equities related to electric vehicles declined in lockstep with Tesla.

China's EV industry saw a decline of 2.3% to 4.3%, mirroring a roughly 8% decline in Tesla following the company's lower-than-expected second-quarter profit.

Tesla appears to be allocating more funds to artificial intelligence and self-driving technologies while battling declining sales and growing costs.

Asian markets received a lacklustre signal from Alphabet's earnings as well. Even while the internet behemoth's earnings above forecasts, slower ad revenue growth and more spending on artificial intelligence pointed to a similar pattern for regional tech behemoths, several of which are scheduled to report in the coming weeks.

Recent sessions witnessed a protracted sell-off on Chinese markets as the country's image deteriorated following dismal economic statistics, particularly that indicating slower-than-expected growth in the second quarter.

Alongside this, the People's Bank announced a lacklustre interest rate drop, and the Chinese Communist Party's Third Plenum likewise produced little indications about more stimulus measures.

Sentiment towards China was also affected by uncertainty surrounding the U.S. presidential election, as investors made assumptions about what would happen to Washington's policy towards China should the country's leadership change.

(Sources: investing.com, reuters.com)