Asian shares skid after technology sell-off hits Nasdaq

05-Jun-2019 Intellasia | AP | 6:00 AM Print This Post

World markets retreated Tuesday after news that the Trump administration is considering anti-trust moves against tech giants triggered a sell-off, pushing the Nasdaq composite index into a correction.

Britain’s FTSE 100 lost 0.3 percent to 7,161.29 and the CAC 40 in France dropped 0.8 percent to 5,201.83. Germany’s DAX declined 0.3 percent to 11,765.90. But Wall Street looked set for gains, with the future contract for the Dow Jones Industrial Average up 0.4 percent at 24,962.00. The future for the S&P 500 index added 0.3 percent to 2,758.40.

In London, eyes were on a meeting between visiting President Donald Trump and British prime minister Theresa May. The two leaders were due to meet with executives from both countries and to discuss a possible trade deal that might take effect once the UK leaves the European Union.

The weaker open in Europe followed losses in Asia, where Japan’s Nikkei 225 index ended flat at 20,408.54.

With no major fresh developments in the standoff between Washington and Beijing over their festering trade dispute, Hong Kong’s Hang Seng dropped 0.5 percent to 26,758.55 and the Shanghai Composite index slipped 1.0 percent to 2,862.28.

In a mild rebuke, the US Trade Representative and Treasury Department issued a statement late Monday criticising a Chinese government report over the weekend that had blamed President Donald Trump’s administration for the trade war between the world’s two biggest economies.

The statement posted on the USTR’s website said the US was “disappointed” with the white paper report issued by Beijing and with statements by Chinese officials that were in pursuit of a “blame game” misrepresenting the nature of the dispute and negotiations with Washington.

The Kospi in South Korea declined less than 0.1 percent to 2,066.97.

Australia’s S&P ASX 200 advanced 0.2 percent to 6,332.40 after the central bank announced it was cutting its benchmark interest rate to a record low 1.25 percent from 1.5 percent. It was the first rate cut in nearly three years.

“Assuming banks cut their rates by 0.25 percent it will take deposit rates to their lowest since the mid-1950s and headline mortgage rates to their lowest since the early 1950s, although some mortgage rates are already at record lows,” Shane Oliver of AMP Capital said in a commentary.

He suggested more cuts may be in the offing.

“Rate cuts are a bit like cockroaches. If you see one there is normally another nearby,” he added.

India’s Sensex gave up 0.2 percent to 40,205.44. Shares were lower in Taiwan but rose in Thailand and Singapore.

Overnight, major US stock indexes were mostly lower amid signs the Trump administration may ratchet up scrutiny on some of the market’s biggest names: Apple, Facebook, Amazon and Google.

Investors were reacting to media reports suggesting that government regulators are setting the stage for potential antitrust probes into each of the four technology giants.

“While the eventual outcome remains uncertain, the intention to investigate the technology industry over competition concerns had sparked jitters across the markets,” said Jingyi Pan of IG.

The sell-off knocked the tech-heavy Nasdaq composite index into a correction, Wall Street speak for a drop of 10 percent or more from a peak. The Nasdaq hit its most recent all-time high early last month, before the trade dispute between the US and China escalated, setting off a month-long slide. The Nasdaq tumbled 1.6 percent to 7,333.02. It’s now down 10.2 percent from its all-time high set May 3.

As the dispute between Washington and Beijing over trade and technology grinds on, investors have been shifting into less risky assets. Bond prices climbed again Monday, pulling the yield on the 10-year Treasury note down to 2.10 percent from 2.14 percent late Friday.

CURRENCIES: The dollar fell to 108.01 Japanese yen from 108.07 yen on Monday. The euro strengthened to $1.1267 from $1.1242.

ENERGY: Benchmark US crude gained 2 cents to $53.27 per barrel in electronic trading on the New York Mercantile Exchange. On Monday, it slid 0.5 percent to settle at $53.25 a barrel. Brent crude oil, the international standard, added 1 cent to $61.29 per barrel. It closed 1.1 percent lower on Monday at $61.28 per barrel.


Category: FinanceAsia

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