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Nikkei Markets

Singapore, Malaysia shares fall after US tech-led selloff

Reports of possible US curbs on Chinese investment in technology revive jitters

KUALA LUMPUR (Nikkei Markets) -- Singapore and Malaysia shares declined on Wednesday as an overnight selloff in U.S. technology names weighed on regional indexes.

Singapore's Straits Times Index declined 1.6% to 3,382.78 while Malaysia's FBM KLCI index dropped 0.3% to 1,857.87.

The tech-heavy Nasdaq Composite declined almost 3% overnight as Facebook slid to its lowest in over eight months. Shares of the social media company have tumbled amid concerns about increased regulatory scrutiny over its handling of users' personal information.

Investors also had to contend with a Bloomberg report that Washington is considering curbs on Chinese investment in technology that it considers sensitive, renewing worries about U.S. trade policies. There was more negative news with the U.S. March consumer confidence data coming in below projections.

"Reports of a restriction on Chinese investment in sensitive technology rattled investors," said Michael McCarthy, chief market strategist at CMC Markets & Stockbroking. He added that while "markets are moving away from pricing an all-out trade war" between the U.S. and China, the possibility of specific action by Washington to restrict investment in technology could prove to be a major worry.

DBS Bank strategists Eugene Leow and Phillip Wee said that the reports indicated a "step up" from trade tariff threats that pounded global markets last week.

The slide in U.S. equities dragged 10-year Treasury yields to seven-week lows.

Lenders, which benefit from a rising interest rate outlook, were the biggest contributors to losses on the STI. DBS Group Holdings and Oversea-Chinese Banking Corp. dropped at least 2.6% each, while United Overseas Bank closed 1.9% lower. Of the 30 STI companies, 25 closed lower and three were unchanged.

Amongst technology names, Apple supplier Hi-P International tumbled 4.1%.

Singapore Airlines closed 0.8% lower. The airline earlier Wednesday said it would invest $350 million in cabin equipment for Boeing's latest Dreamliner variant.

Mapletree Greater China Commercial Trust declined 2.5%. It said it would acquire about a 98.5% stake in a portfolio of six freehold commercial real estate assets located in Japan for 60.9 billion yen ($580 million).

In Malaysia, leisure and hospitality company Genting Malaysia was the day's top loser on the KLCI, falling 3.6%. AMMB Holdings was another big loser, down 2.7%.

Of the tech names, Inari Amertron, Malaysia's most valuable tech company by market capitalization, dropped 2.4%. Globetronics Technology, which makes sensors for mobile phones, dropped 1.8%.

Inari and Globetronics could take a sales hit if U.S.-China trade tensions escalate, according to UOB Kay Hian Securities. Both companies share a U.S. client that contributes a major portion of earnings, analyst Yeoh Bit Kun said.

WCE Holdings dropped 2.6%, adding to Tuesday's 14.7% loss. Facing rising land acquisition costs, the company said Monday it would need to raise up to 417.81 million ringgit ($107.90 million) to fund its West Coast Expressway project.

Sapura Industrial, which makes automotive components, rose 0.7% after net profit jumped 46%, boosted by recognition of customer claims.

Oil-and-gas company Sapura Energy, a sister company of Sapura Industrial, lost 8.3%. The company recorded a 2.28-billion-ringgit net loss for the fourth quarter of 2017, dragged by impairment charges.

--Alexander Winifred and Nimesh Vora

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