Asia shares dragged under by U.S. tech slide, dollar firm

Spreadbetters expected European shares to follow suit, forecasting lower openings for Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.8 percent, with the tech index .MIAP0IT00PUS sliding 1.5 percent.

Technology stocks sold off sharply on Wall Street on Friday on concerns about Apple's (AAPL.O) new iPhones and a cautious Goldman Sachs report about the stocks, prompting heavy profit taking after an extended rally.[.N]

Asia's tech giants followed suit on Monday, with South Korea's Samsung Electronics (005930.KS) losing 1.8 percent, Taiwan Semiconductor Manufacturing Co (2330.TW) down 1.6 percent and Japan's Sharp Corp (6753.T) shedding 2.7 percent.

Japan's Nikkei .N225 was down 0.6 percent and South Korea's KOSPI slid 1.2 percent. Hong Kong's Hang Seng .HSI lost 1.3 percent while Shanghai .SSEC fell 0.5 percent.

Electronics shipments have helped lead an export revival for many of Asia's trade-reliant economies.

"The drop on Nasdaq appears to be taking a toll today. But the tech sector was strong and perhaps ready for profit taking, with the Fed meeting also approaching," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.

"One day of losses on Wall Street does not change the broader picture but it has managed to dampen sentiment."

The Fed will begin a two-day meeting ending on Wednesday at which it is widely expected to hike interest rates. The focus is on whether the Fed thinks the U.S. economy is robust enough to withstand further rate increases through 2017 and how it plans to whittle down its massive balance sheet.

A rate hike accompanied by a message suggesting that the Fed may raise rates more than expected in 2017 would support the dollar but be negative for equity markets.

"Political events like the UK election and Comey's testimony are over and the focus this week shifts to monetary policy," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

"The equity markets and the dollar have mostly priced in the Fed signalling three rate hikes in 2017. That explains why U.S. equities have held up. But if the Fed hints at more than three hikes, that could trigger a sell-off in equities that many are bracing for."

Equities navigated through last week's potential landmine events relatively unscathed.

Congressional testimony by former FBI Director James Comey caused few market ructions, and the fallout of Britain's surprise parliamentary election result, at which the ruling party lost the majority, was mostly contained to the pound.

Sterling was a shade higher at $1.2755 GBP=D4 on Monday after sliding 1.7 percent on Friday, when it plumbed a near two-month low of $1.2636.

The dollar was steady at 110.300 yen JPY=. The euro inched up 0.1 percent to $1.1206 EUR= following three straight days of losses against the greenback.

The dollar index against a basket of currencies was little changed at 97.200 .DXY following its rise on Friday to a 9-day high of 97.500.

The U.S. currency received support as Treasury yields, at seven-month lows early last week at the height of investor jitters towards the UK elections and Comey's testimony, continued their bounce ahead of the Fed's anticipated rate hike.

In commodities, crude oil prices extended gains after rising on Friday when a pipeline leak in major producer Nigeria overshadowed supply worries weighing on the market. [O/R]

U.S. crude CLc1 and Brent LCOc1 were both 0.6 percent higher at $46.10 and $48.45 a barrel, respectively.

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