* Tech sector losses biggest weight on Asia stocks
* Oil falls below $79 on stable dollar, inventories
* Market still focused on rate differentials among
currencies
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, Oct 21 (Reuters) - Profit taking in technology
stocks pushed Asian shares slightly lower on Wednesday, though
they remained near a 15-month high, while some stability in the
U.S. dollar and a rise in inventories knocked oil below $79 a
barrel.
Major European stocks <> opened modestly higher while
U.S. stock futures <SPc1> were little changed after Wall Street
slid overnight on disapopinting housing data. []
A recovery in demand for tech products has been
unmistakable and so far earnings for the sector have held up,
but dealers were prone to trim bets ahead of a heavy load of
Chinese economic data on Thursday and with the MSCI IT index
for Asia Pacific ex-Japan <.MIAPJIT00PUS> already up 87 percent
so far this year.
"Investors still favoured technology shares amid a slew of
positive results from U.S. tech companies, but temptation to
take profits could take a toll after tech shares' recent
gains," said Andrew Deng, an assistant vice president at Taiwan
International Securities Corp.
The factors that have pushed global equity markets to a
one-year high and knocked the U.S. dollar to a 14-month low
against a basket of major currencies have not changed
overnight. Still, investors were pausing to take a closer look
at where bets appear stretched.
Japan's Nikkei share average <> was nearly even on the
day, with strength in Fast Retailing <9983.T> offset by
weakness in shares of Tokyo Electron <8035.T>, the world's
second-largest maker of chip equipment, and Advantest <6857.T>.
The weakness could be temporary, though. A report on
Tuesday showed orders for Japanese micro chip gear outpaced
sales for the sixth consecutive month in September.
[]
Adding to the case that tech shares may have further to
run, South Korea's LG Electronics <066570.KS> posted a 49
percent rise in operating profit that beat forecasts and pushed
up shares 1.7 percent.
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> slipped 0.5 percent, but has still risen 67
percent so far this year. On Tuesday the index hit its highest
level since July 31.
Hong Kong <> and Shanghai <> share indexes eased
as traders awaited Chinese third-quarter GDP data on Thursday.
A Reuters poll showed economic growth likely accelerated to 8.9
percent in the quarter from a year earlier. []
Sales to China have helped boost neighbouring Asian
economies, partly offsetting persistently weak demand in major
Western export markets.
TECH STOCKS LAG
The MSCI IT sector fell 1.6 percent, making it the biggest
underperformer in the region, followed by materials and
telecoms.
It is trading at a multiple of 16.3 times its earnings
expected 12 months ahead, according to Thomson Reuters I/B/E/S.
That is higher than the 10-year average valuation of 14.4
times.
The Thomson-Reuters index of the region's stocks
<.TRXFLDAXPU> was down 0.6 percent.
In currency markets, the ICE Futures U.S. dollar index
<.DXY>, based on its trade-weighted value relative to six other
major currencies, was little changed on the day after hitting
the lowest since early August on Tuesday.
The euro's inability on Tuesday to push above $1.50, a
level that was fiercely protected by investors in options, has
caused some dealers to slash their short-term bets on the
common currency and wait to buy it back on the cheap.
The market is clearly still focused on exploiting interest
rate differences between currencies. For example, the New
Zealand dollar briefly cut its losses and shot to US$0.7500
after the central bank governor reportedly said currency
strength will not prevent rate rises. []
Oil traders pushed U.S. crude for November delivery down
0.3 percent to $78.84 a barrel in response to the stabilising
dollar and a report showing a bigger-than-forecast rise in U.S.
oil inventories.
Brent was down 0.4 percent to $76.96 a barrel.
"There is plenty of oil around at the moment and the
current price is associated with tight supply so I am a little
bearish and I suspect it will adjust lower," said David Moore,
commodities strategist at Commonwealth Bank in Sydney.
(Additional reporting by Joan Hsu in TAIPEI and Nick Trevethan
in SYDNEY)
(Editing by Kim Coghill)
