Stock markets slide on tech sell-off, dollar sags - British Herald
July 11, 2020
Finance

Stock markets slide on tech sell-off, dollar sags

TOKYO (Reuters) – Asian stock markets skidded on Tuesday and Europe was expected to follow, pressured by sharp losses on Wall Street as technology firms tumbled on worries about slackening demand.

The dollar sagged after weak U.S. data further sapped confidence in the currency, while oil prices slipped despite expected OPEC supply cuts.

Spreadbetters expected European stocks to open lower, with Britain’s FTSE  falling 0.1 percent, Germany’s DAX losing 0.5 percent and France’s CAC dipping 0.3 percent. U.S. S&P mini futures  were down 0.3 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan  dropped 1.2 percent.

Tech stocks were under pressure across Asia following U.S. losses. In Seoul, Samsung Electronics  fell 2 percent and SK Hynix Inc dropped 3.5 percent, while Japan’s Tokyo Electron was down 1.8 percent, Advantest  lost 2.7 percent and Sony Corp  shed 3.1 percent.

U.S. stocks came under heavy selling on Monday, with Nasdaq  tumbling 3 percent, as investors dumped Apple , internet and other technology shares. Conflicting signals between the United States and China on their trade dispute added to caution. [.N]

“The drop by U.S. stocks will cut short any attempt by equity markets to mount a sustained bounce. Investor sentiment has been subdued by lingering weakness in U.S. technology shares,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

Japan’s Nikkei slipped 1.1 percent, with shares of Nissan Motor Co  tumbling than 5 percent after its Chairman Carlos Ghosn was arrested on Monday for alleged financial misconduct. He will be fired from the board this week.

“This incident will make investors review if Japanese corporate governance is working,” said Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan.Elsewhere in Asia, the Shanghai Composite Index retreated 1.7 percent, Australian stocks  lost 0.4 percent and tech-heavy South Korean shares  dropped 1 percent.

Global stock markets have suffered a sharp shakeout in the past two months, pressured by worries of a peak in corporate earnings growth, rising borrowing costs, slowing global economic momentum and international trade tensions. Trillions of dollars were wiped off equities in a particularly torrid October month.

In currencies, the dollar struggled at a near two-week low against a basket of currencies.

Data released on Monday showed U.S. home builder sentiment recorded its steepest one-month drop in over 4-1/2 years in November.

The dollar had also been weighed down after Fed Vice Chair Richard Clarida and Dallas Fed President Robert Kaplan late last week raised concerns over a potential global slowdown.

The U.S. currency has rallied strongly this year, buoyed by three Fed rate hikes and a robust economy, though some expect the bull run may be nearing an end.

With long-term U.S. Treasury yields slipping to a seven-week low of 3.052 percent  in the wake of weaker stocks and U.S. housing data, the dollar index against a basket of six major currencies  hovered near 96.120, an 11-day low plumbed on Monday.

The euro was little changed at $1.1450  after gaining 0.35 percent overnight.

The dollar slipped to a three-week low of 112.40 yen  and last traded at 112.55.

The Australian dollar, sensitive to shifts in risk sentiment, extended the previous day’s retreat, slipping 0.3 percent to $0.7274 .

Oil prices lost steam as fears about slower global demand and a surge in U.S. production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC). [O/R]

U.S. crude futures were down 0.4 percent at $56.98 per barrel and Brent  slipped 0.6 percent to $66.40 per barrel. [O/R]

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Shri Navaratnam and Kim Coghill)

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