By Gregor Stuart Hunter 

Asia-Pacific stock markets pared early losses Tuesday as investors took a more measured view of the overnight slump in tech shares sparked by concerns about whether Facebook Inc. did enough to stop improper access and handling of user data.

Japan's Nikkei Stock Average shed 0.5% after losing as much as 1.2% earlier in the day, while Australia's S&P ASX 200 fell 0.4% and Taiwan's Taiex fell 0.3%. Other markets including Hong Kong's clawed back to largely flat levels, while South Korea's Kospi and a number of Chinese benchmarks pushed up into positive territory as buying opportunities emerged.

News events were creating opportunities for investors to find bargains, said Jack Siu, investment strategist for Asia-Pacific at Credit Suisse, who also flagged a looming Federal Open Market Committee meeting where the Fed is widely expected to raise U.S. interest rates.

"We think the market will remain volatile in the next few days because of the news flow, not only the technology sector but also the FOMC meeting and the possibility of tariffs between the U.S. and China," he said. "We think this is an opportunity to buy," he added, saying he was recommending clients buy stocks in Europe, China and Korea, especially tech and financial stocks.

The Fed meeting, which could see policy makers predicting four instead of three rate increases this year, seemed to weigh most heavily on equities in the Philippines and Indonesia. The currencies of both countries could be buffeted if a faster pace of rate raising emerges. Stocks in the Philippines were down 2.6%.

The tech sector turmoil set the scene for the day.

Facebook shares plummeted 6.7% and slid another 1.5% in after-hours trading after investors learned Cambridge Analytica, a firm that helped President Donald Trump's 2016 election campaign, had collected and used without permission data from the accounts of millions of users. Cambridge Analytica has said it complied with Facebook's rules.

The Nasdaq Composite fell 1.8%, leading a 1.4% decline for the S&P 500.

Among Chinese tech shares with U.S. listings, Baidu Inc. shares fell 3.6% Monday, leading declines. Uber suspended its self-driving car program Monday after the first known fatality from an autonomous vehicle. Baidu is among the companies attempting to bring the technology to China. Largan Precision, a Taiwan-listed maker of camera equipment that sells lenses used by self-driving automobiles, fell 3.3% Tuesday.

Funds tracking the MSCI Emerging Markets Index, which gives a 27% weighting to technology companies--many of them in China, South Korea and Taiwan--also sold off Monday.

Short sellers trading tech stocks including Facebook, Apple Inc., Amazon.com Inc., Netflix Inc. and Alphabet Inc.'s Google made mark-to-market profits of $980 million from Monday's declines, wrote Ihor Dusaniwsky, managing director for predictive analytics at S3 Partners. The size of the stocks in market benchmarks could magnify broader selling.

"With so many of these stocks in passive investment vehicles such as ETFs and funds, these stocks are prone to accelerated negative returns" after significant market downturns, he wrote.

Bond markets and currencies were broadly unchanged. The yield on the U.S. 10-year Treasury note was last up 0.01% at 2.8573%, while the ICE U.S. Dollar Index, which tracks the dollar's strength against a basket of six major currencies, was up 0.1%. The dollar last bought Yen106.28.

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

(END) Dow Jones Newswires

March 20, 2018 02:52 ET (06:52 GMT)

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