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Asian stocks tumble following sell-off on Wall Street

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From China Shanghai Composite (SHCOMP) lost 1.7%, while that of Japan Nikkei 225 (N225) fell 1.4% and that of South Korea Kospi (KOSPI) fell 0.9%.
From Hong Kong Hang Seng Index (HSI) it fell 1.6%, recovering slightly after falling more than 2% earlier in the day. Energy stocks were the biggest drag on the index, with oil companies PetroChina and CNOOC and refinery Sinopec falling 4% or more.

The collapse of the energy sector came after a difficult day for oil prices, which fell on Thursday amid fears that the global economic recovery could be hampered by stubborn coronavirus outbreaks in Europe and the slow deployment of vaccines. Brent’s world crude, a benchmark for oil it fell nearly 7% to $ 63.28 per barrel, while U.S. oil fell more than 7% to $ 60 a barrel. Oil futures continued to slip during Asian hours.

“With the distribution problems of well-telegraphed vaccines in Europe already weighing on the Bloc’s markets,” news of major blockades in France “did not play a major role in the disappearance of oil,” wrote Jeffrey Halley, senior analyst market in Asia-Pacific in Oanda. Friday research note.

These were not the only concerns that hit the markets. Hong Kong’s technology sector also suffered a beating, following a sharp drop in Wall Street-focused technology Nasdaq Composite (COMP) Thursday.

Although the top three U.S. indices ended in the red on Thursday, the Nasdaq suffered the strongest losses as the yield on 10-year Treasury bonds rose to a new 13-month high.

“The rapid rise in long-term U.S. yields has scared investors back into the night, as there seems to be no lasting respite for the fixed income onslaught,” wrote Stephen Innes, chief strategist at Sydney Axi-based global online broker market, in a research Friday note.

He added that technology stocks were especially affected because rising bond yields are bad news for high-growth companies, as inflation is hurting the value of their future earnings. Low rates increase interest in riskier investments, but right now investors are worried that as economies reopen, interest rates will rise earlier than expected.

According to Halley, a start of talks between the United States and China in Alaska could also be weighing on the markets.

The two sides changed their beards after US Secretary of State Antony Blinken warned of the need respect the global order. The Chinese eventually accused the U.S. delegation of being “condescending” in tone, while a U.S. official said Beijing representatives seemed “intent on stepping into the rostrum.”

“To summarize,‘ China is not happy, ’it is so normal,” Halley wrote. “Any improved trade premium has disappeared from mainland China’s stock markets today and the rift between the two superpowers seems as far-fetched as ever.”

US futures rose on Friday. Dow (INDU) futures rose 48 points, or 0.2%. S&P 500 (SPX) futures rose 0.3%, while Nasdaq (COMP) futures advanced 0.7%.

– Julia Horowitz and Anneken Tappe contributed to this report.

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