TECH BOOM

A global sell-off in tech stocks this week has raised questions about whether the current surge in demand for electronics products and components has peaked or whether investors are simply rotating to other sectors, such as banking.

For now, the economic data suggests Asia’s electronics producers remain in good shape.

South Korea’s factory activity expanded at the strongest pace in 55 months in November, with the Nikkei/Markit PMI rising to 51.2 from 50.2 in October. Japanese manufacturing grew at the fastest pace in more than 3-1/2 years. Taiwan’s PMI came at 56.3 in November, its best reading in 6-1/2 years.

“Even as the smartphone-related boost starts to fade, the outlook for 2018 remains bright amidst the global recovery,” HSBC Greater China economist Julia Wang said.

Japanese companies raised spending on factories and equipment in July-September by 4.2 percent from the same period last year, suggesting its September quarter GDP growth figures could be revised higher. Japan’s jobless rate held steady at 2.8 percent in October and the availability of jobs reached the highest in almost 44 years, although inflationary pressures in the world’s third largest economy remain stubbornly weak.

Likewise, in South Korea, export growth slowed but still recorded a 13th straight month of expansion in November, while inflation eased to the slowest in 11 months, reinforcing views that the new monetary tightening cycle will be gradual.

Reporting by Marius Zaharia; Editing by Sam Holmes