Asian tech sector grows over 90pc as other sectors see mediocre performance in Q2

The technology sector in Asia gained almost 93 percent, while the whole of the equity market grew 32 percent in the second quarter, research provider Morningstar said in an Asian market investment outlook for the third quarter of this year. 
As the tech sector outperformed the rest that yielded pedestrian returns, retail sales softened in Hong Kong and China. 
Morningstar attributed recent weakness in headline retail sales data to declines in consumer electronic and electric vehicle sales, due to reduced government subsidies. 
Slow growth is expected, as excess capacity remains a concern. Margin pressure is expected to ease for the banks over the next 12 months, ending the decline in earnings. 
The ETF flows in Hong Kong in the second quarter remained strong, with HK$474.1 billion worth of equity assets. 
China consumption data remains low but sees improvement, travel remains robust. 

On the other hand, Japan’s technology sector has swung from a 14 percent discount to being overvalued by 24 percent at the moment. 
Morningstar advises seeing a 20 percent to 30 percent correction in share prices before buying. 
The surge in single-stock leveraged products in Hong Kong has drawn concerns over key pitfalls to watch for, including concentration risks, high fee, eroded return due to volatility risk, and more market trading aspects to be considered. 
Lorraine Tan, regional director of equity research at Morningstar, believes oil prices to stay benign amidst the US-Iran war, when asked about concerns over other commodities affected by supply disruptions as the world look for African, British and Russian oil as substitutes.

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