TOKYO (Reuters) - Asian shares flinched from testing their 2007 record peak on Wednesday, as investors booked profits in high-tech shares while oil prices hit three-year highs due to production cuts and a fall in inventories.
European shares are expected to dip slightly with Germany’s Dax futures down 0.2 percent and France’s Cac futures and Britain’s FTSE futures down 0.1 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5 percent after six straight days of gains until Tuesday, that had taken it within a stone’s throw from the record high touched in November 2007.
Information technology shares led the decline with a 1.4 percent fall as Samsung Electronics extended losses. The tech company’s profit guidance disappointed investors and raised worries the memory chip boom may be coming to an end.
Japan’s Nikkei also shed 0.3 percent, slipping from 26-year highs hit the day before.
“The rally has been a bit too fast. Investors are taking profits in high-flying hi-tech shares. But the earnings and economic outlook in Asia remains solid,” said Yukino Yamada, senior strategist at Daiwa Securities.
Indeed, expectations of solid corporate profit growth helped
Wall Street’s major indexes extend the New Year rally to record levels for a sixth day on Tuesday.
“U.S. fourth-quarter earnings are expected to rise more than 10 percent from the previous year. The market has been supported by the consensus that the goldilocks economy will continue while the Fed will raise interest rates only slowly,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Profits for S&P 500 companies are expected to rise 11.8 percent in the fourth quarter, compared with an 8-percent increase a year earlier, according to Thomson Reuters I/B/E/S.
Some investors said risk sentiment had been boosted by an apparent easing in tensions in the Korean peninsula after North and South Korea agreed to future talks in their first official dialogue in more than two years.
Washington welcomed what it said was a first step to solving the North Korean nuclear weapons crisis, even though Pyongyang said those were aimed only at the United States and not up for discussion with Seoul.
In the currency market, the yen maintained the gains it made the previous day after the Bank of Japan trimmed the amount of its buying in long-dated bonds.
While the move was in line with the BOJ’s subtle reduction in its bond buying over the past year, the so-called ‘stealth tapering’, the reaction highlighted how sensitive markets are to a pullback in Japan’s massive stimulus.
“I don’t think yesterday’s operation is a hint of a policy change. But it highlighted the fact that unwinding of central bank stimulus will be a main theme this year. We could see more moves like this,” said a currency trader at a U.S. bank.
The Japanese government bond yield ticked up to 0.080 percent, the top of its range in the past several months.