Asian shares slide after big-tech sell-off on Wall Street

PTI Tokyo | Updated on October 05, 2021

FILE PHOTO: A man is seen against an electronic board showing stock information at a brokerage house in Fuyang, Anhui province, China   -  REUTERS

Tokyo’s Nikkei dropped 3 per cent, while oil prices edged higher

Shares have fallen in Asia after a broad slide on Wall Street led by technology companies. Tokyo’s Nikkei dropped 3 per cent, while oil prices edged higher.

China-US tensions regained the spotlight after the US Trade Representative Katherine Tai said she plans frank conversations with officials in Beijing about an interim trade deal aimed at resolving a tariff war.

Tai said she did not want to “inflame trade tensions with China.” But her comments suggested continuity of the US policy toward Beijing under President Joe Biden from the strategy adopted by his predecessor, Donald Trump.

Speaking to the Center for Strategic and International Studies in Washington, D.C., she also said that the US “must defend to the hilt our economic interests” and take “all steps necessary to protect ourselves against the waves of damage inflicted over the years through unfair competition.”

Also read: Asian stocks fall to near 1-year low as oil prices stoke inflation worries

Shanghai is closed until Friday for a national holiday. But shares fell 0.3 per cent in Hong Kong to 23,989.61, while Tokyo finished the morning down 2.8 per cent at 27,658.31. South Korea’s Kospi dropped 2.1 per cent to 2,956.04 and the S&P/ASX 200 in Australia declined 0.8per cent to 7,218.90.

Rising bond yields and energy prices are stoking investor concern about inflation. The price of the US oil has risen to nearly $78 per barrel, its highest level since 2014, as OPEC and allied oil producers stuck to a plan for cautious production increases even as global demand for crude surges.

The yield on the 10-year Treasury note held steady at 1.48 per cent. The S&P 500 fell 1.3 per cent to 4,300.46. The Dow Jones Industrial Average dropped 0.9per cent to 34,002.92, and the tech-heavy Nasdaq lost 2.1 per cent to 14,255.48. Small company stocks also fell. The Russell 2000 index gave up 1.1 per cent to 2,217.47.

Facebook slid 4.9 per cent a day after a former employee told “60 Minutes” that the company has consistently chosen its own interests over the public good. The social network and its Instagram and WhatsApp platforms also suffered a worldwide outage that began around midmorning US time on Monday.

Apple fell 2.5 per cent and Microsoft dropped 2.1 per cent. Natural gas prices jumped 2.6 per cent. Energy companies rose along with energy prices. Devon Energy rose 5.3 per cent for the biggest gain in the S&P 500. Marathon Oil climbed 4.1 per cent.

In Tuesday trading in Asia, benchmark US crude was up 35 cents to $77.97 per barrel. Brent crude, the standard for international pricing, gained 47 cents to $81.73 per barrel.

Also read: Sensex, Nifty jump 1% as RIL, pharma, metal stocks shine

Investors are increasingly worried about inflation as oil prices rise and companies contend with supply problems that increase their costs and force them to raise prices. Wall Street is also worried about the Federal Reserve’s timing on trimming back bond purchases and an eventual move to raise its benchmark interest rate.

Wall Street will get more information on the economy’s health this week. On Tuesday, the Institute for Supply Management will release its service sector index for September. The services sector is the largest part of the economy and its health is a key factor for growth.

On Friday, the Labour Department will release its employment report for September. The employment market has been struggling to fully recover from the damage done by Covid-19 more than a year ago. The US dollar rose to 111.11 Japanese yen from 110.93 yen. The euro slipped to $1.1608 from $1.1618.

Published on October 05, 2021

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