Asian shares mixed after another Wall Street tech sell-off
- 11 Sep 2020
Asian shares were mixed Friday following a selloff of technology shares on Wall Street.
Japan's benchmark Nikkei 225 recouped early losses to rise 0.6% to 23,383.87. South Korea's Kospi dropped 0.1% to 2,394.09, while Australia's S&P/ASX 200 lost 0.8% to 5,859.40. Hong Kong's Hang Seng gained 0.7% to 24,471.29, while the Shanghai Composite rose 0.6% to 3,255.28.
Shares were lower in Taiwan but mixed in Southeast Asia.
Analysts say investors are preoccupied with the coronavirus pandemic and hopes for development of a safe, effective vaccine.
While Big Tech is benefiting from the shift to online life that the pandemic and ensuing stay-at-home economy has accelerated, critics said their stocks prices have surged too high.
"Big tech stocks might have seemed like safe havens, but they have found themselves at the center of a brutal sell-off,” said Stephen Innes, chief global market strategist at AxiCorp.
The catch is that progress in curbing COVID-19 could hurt technology shares, Innes said.
"But keep your eye on the prize. A virus vaccine is a key to the second leg of growth recovery, which will be globally-coordinated and could run for a while as doses are distributed gradually,” he said.
The latest gyrations on Wall Street followed a wild stretch where the S&P 500 careened from its worst three-day slump since June to its best day in nearly three months.
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The selling came as the odds lengthen that Congress will deliver more aid to the economy before November’s elections, support that many investors say is crucial after federal unemployment benefits and other stimulus expired. Partisan disagreements on Capitol Hill have kept Congress at a seeming impasse.
Nicholas Mapa, senior economist at ING, said risk aversion was dominating Asian trading with the technology sector weighing on overall sentiment.
"Investors are struggling to find a catalyst to reverse the recent downtrend with the much-anticipated U.S. fiscal stimulus bill still in limbo,” he said.
Tech stocks accounted for the biggest share of the broad selloff on Wall Street. The sector has been at the center of the market’s swings, hurt by criticism that their recession-defying surge in recent months was overdone.
The S&P 500 fell 1.8% to 3,339.19, its fourth decline in five days. The index is on pace for its second straight weekly loss. The Dow Jones Industrial Average dropped 1.5%, to 27,534.58. The Nasdaq gave up 2% to 10,919.59. The Russell 2000 index of smaller company stocks lost 1.2%, to 1,507.75.
Thursday’s selling followed a batch of new economic data on jobs and wholesale prices. The government said 884,000 workers applied for unemployment benefits last week. The number was flat from last week’s number, which was revised higher, and it’s the lowest it’s been since the number of layoffs began exploding in March due to the coronavirus pandemic.
A separate report showed inflation remains very weak at the wholesale level, suggesting demand remains slack, though it was stronger last month than economists had forecast.
The market’s focus remains on big technology stocks that are so big their movements alone can move broad market indexes. Apple, Microsoft, Amazon, Facebook and Google’s parent company alone account for 23% of the S&P 500, for example.
Many analysts say the recent tumult for technology stocks isn’t that surprising given how high they had soared. Apple more than doubled in less than five months through the pandemic, Tesla surged 74.1% last month alone and Zoom Video Communications earlier this month was up nearly 573% for 2020.
Benchmark US crude oil lost 14 cents to $37.16 a barrel in electronic trading on the New York Mercantile Exchange. Brent, the international standard, fell 16 cents to $39.90 a barrel.
The US dollar inched up to 106.17 Japanese yen from 106.15 yen late Thursday. The euro rose to $1.1835 from $1.1816.
Associated Press
