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Wall Street savaged by tech sell-off

27 October, 2018, 20:56 | Author: Shawna Walton
  • Wall Street

CURRENCY: Australian Dollar was declined against greenback and other major currencies on Thursday, as a rout on Wall Street and weak European and USA economic data dented global risk sentiment, sending investors scurrying to safe-haven assets including government bonds. Japan's Topix index plunged 2.3%, heading for its lowest close since September 2017, while the Nikkei 225 Stock Average lost 2.8%.

The MSCI Asia Pacific Index fell as much as 2.2% on Thursday, taking its slide from a January peak to 21%. Hong Kong's Hang Seng index.HSI sank 2.2 percent.

Charts for the entire region were awash with the red that indicates losses, but the declines were mostly in the 2 per cent to 3 per cent range.

"Coming online with the overtly risk-off backdrop from U.S. markets, investors in the Asian region would be taking the cue to head for the doors", Jingyi Pan of IG said in a commentary. At its session lows, the Dow had fallen 548.62 points, while the S&P 500 and Nasdaq had lost more than 2 percent each on Tuesday.

The S&P 500 index fell 84 points, or 3.1 per cent, to 2,656. The Russell 2000 index of smaller-company stocks gave up 3.8 per cent to 1,468.70 and is down 4.4 per cent for the year. The dumping isn't necessarily reflective of company fundamentals, but a shift in market behaviour: the constant bidding up of stocks considered high growth by momentum traders is disappearing, resulting in a fall in the stock's price.

"It looks like more panic and fear as the selling has continued to roll", said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance based in Charlotte, North Carolina.

"Investor sentiment remains cautious as we anticipate the reports of over 100 S&P 500 companies including Amazon (AMZN.O), Alphabet (GOOGL.O) and Comcast (CMCSA.O)".

"The sentiment and the outlook seems to be turning more negative, or at the very least, less rosy". "Could Asian markets really withstand four rate hikes in USA next year?" Texas Instruments, a major chipmaker, slumped 8.2 per cent and AT&T fell 8.1 per cent.

Technology stocks also buckled and slid 2.14 percent, in tandem with global peers, over concerns of slowing growth in China and a tepid forecast from Apple supplier AMS AG's.

As global share markets crumbled for a second day, the Australian dollar held its nerve, buying 70.74 USA cents from 70.99 United States cents on Wednesday.

Twitter rose 18.6 percent after strong ad sales boosted third-quarter profit, while Comcast gained 18.6 percent after the media company's quarterly results beat Wall Street estimates. Netflix gave back 9.4 per cent and Amazon dropped 5.9 per cent. Alphabet also just reported its Q3 2018 results, with earnings of $33.74 billion - up 21 per cent from the same quarter previous year but not beating expectations.

Boeing was one of the few gainers Wednesday. Benchmark U.S. crude added 1 percent to $67.08 per barrel in NY. Brent crude, used to price worldwide oils, dropped 4.1 percent to $76.52 per barrel in London. The euro rose to $1.1486 from $1.1466.

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