Asia shares step back from record, tech jitters return

Market Overview - Asian shares retreated from record highs due to concerns about shrinking margins in the tech sector, particularly affecting companies like Apple, leading investors to seek safe-haven bonds ahead of key US inflation data [1] - The technology-heavy Nasdaq Composite fell 2.0% after Cisco Systems reported a quarterly adjusted gross margin below estimates, resulting in a 12% drop in its shares and a loss of approximately $40 billion in market capitalization [1][2] Technology Sector - The selloff impacted major tech companies, with Apple experiencing a 5.0% decline, marking its largest daily drop since April of the previous year [2] - Concerns about AI disruption also affected transportation companies, indicating a broader market shift towards defensive sectors with more stable earnings [2][3] Asian Markets - MSCI's broadest index of Asia-Pacific shares outside Japan decreased by 0.6%, reducing the week's gain to 4.1%, while Japan's Nikkei index fell 0.9% but remained up 5.3% for the week [3] - Chinese blue chips and Hong Kong's Hang Seng index also saw declines of 0.6% and 1.5%, respectively [3] Bond Market - The broad selloff in stocks led to increased demand for US Treasuries, with the yield on the benchmark 10-year note dropping seven basis points to 4.1154% [5] - A strong auction of 30-year bonds contributed to a decline in longer-term yields, with 30-year yields falling 8.5 basis points to 4.728%, the lowest since December [5] Economic Indicators - Attention is focused on upcoming US inflation data, with forecasts predicting a monthly rise of 0.3% in the core measure, which would lower the annual rate from 2.7% to 2.5% [7] - A stable inflation result could invigorate market sentiment and enhance cyclical trade activity [7] Currency and Commodities - The Australian and New Zealand dollars weakened, with the Aussie steady at $0.7089 after a 0.5% overnight loss, and the kiwi at $0.6033 after a 0.3% decline [8] - Oil prices remained flat following a 3.0% drop due to falling demand, with West Texas Intermediate crude at $62.95 and Brent crude at $67.65 per barrel [9]