Tech Shares Lead Asia Markets Lower

Asian stock markets hit session lows in afternoon trading Wednesday, shedding gains from earlier in the week, as technology shares continued a global slump.

The Nikkei Stock Average was recently down 2%, erasing much of Tuesday’s 2.7% gain. SoftBank Group 9984 -4.24% slid 3.8% and Tokyo Electron 8035 -4.78% dropped 3% even as the yen reversed some of its strengthening from Tuesday’s U.S. trading day.

Several regional stock indexes, including tech-heavy benchmarks in South Korea and Taiwan, were down at least 1%. In Hong Kong, Tencent Holdings TCEHY -2.91% lost 3.5%, while smartphone-component suppliers AAC Technologies and Sunny Optical each fell at least 5%.

JP Morgan Asset Management reduced its “significant overweight” position in tech stocks during the past 18 months, shifting into financials, said Ayaz Ebrahim, portfolio manager for emerging markets in Asia-Pacific. “We believe higher interest rates will benefit insurance companies as well as banks.”

New Zealand’s NZX-50 ended down 1.4%. The country’s biggest company by market capitalization, a2 Milk, fell 6.5% after a report emerged that Nestlé has introduced a competing infant-formula product in China. Still, a2 Milk shares are up 60% this year.

S&P 500 futures were recently down 0.1% ahead of the third reading on fourth-quarter U.S. economic growth due later Wednesday. Though the yen softened some during Asian trading, other haven assets attracted buying. Gold futures and government-bond prices rose.

The 10-year U.S. Treasury yield fell to 2.78%, reaching levels last seen in early February, “as bond investors reacted to turmoil surrounding technology stocks, specifically Facebook , ” analysts from Lucror Analytics wrote in a research report. The yield on 10-year German bunds dropped below 0.5% for the first time in almost three months; yields fall when bond prices rise.

Analysts from Société Générale said pricing reflects “a scenario of extreme prudence” from the European Central Bank but would look “stretched” if the central bank ends its bond-buying program in 2018 and starts raising rates the following year.

In commodities markets, oil futures fell 1%, near session lows. Crude prices started falling midday Tuesday in the U.S. as equities there turned; the declines continued after the U.S. settlement.

Write to Gregor Stuart Hunter at gregor.hunter@wsj.com

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