Asia facing sharp falls after Wall Street rout

Asia facing sharp falls after Wall Street rout

By Wayne Cole

SYDNEY (Reuters) - Asian share markets face a rough ride on Thursday after a tumble in technology stocks inflicted the largest daily decline on Wall Street since 2011, wiping out all its gains for the year.

Nikkei futures were down 2.7 percent and pointing to opening losses of around 600 points for the cash index <.N225>. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> seemed certain to start at its lowest since March last year.

The dive in formerly high-flying tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries falling the most since May to 3.11 percent.

"Concerns that earnings growth may be peaking against an unsettled global backdrop and that fiscal stimulus will wane continued to weigh on sentiment," said analysts at ANZ in a note.

Global worries included the growing international pressure on Saudi Arabia over the death of Jamal Khashoggi.

Adding to the air of tension police intercepted suspected bombs mailed to former U.S. President Barack Obama, Hillary Clinton and other high-profile Democrats, as well as to CNN, in what New York officials branded an act of terrorism.

Weak readings on manufacturing in Europe added to angst over world growth, as did a surprise slump in U.S. home sales which suggested rising mortgage rates were sapping demand for housing.

On Wall Street, disappointing forecasts from chipmakers hammered the tech sector. They followed disappointing forecasts on Tuesday from industrial giants Caterpillar and 3M .

The Nasdaq <.IXIC> closed down 12.4 percent from its Aug. 29 record closing high, falling 4.4 percent for the day in its biggest one-day percentage decline since Aug. 18, 2011.

The Dow <.DJI > fell 2.41 percent and the S&P 500 <.SPX> lost 3.09 percent.

In currency markets, funds flowed to the U.S. dollar and Treasuries and out of the euro and the British pound.

The euro shed 0.7 percent to $1.1397 and breached a major chart bulwark at $1.1430. Against a basket of currencies, the dollar climbed to a nine-week peak and was last trading at 96.370 <.DXY>. [USD/]

Sterling hit a seven-week trough $1.2865 , having dropped 0.8 percent overnight.

The yen got the usual safe-haven bid, with the euro skidding to a two-month low at 127.68 yen . Even the dollar eased to 112.08 yen .

Oil prices eased amid all the concerns over global growth. Brent crude fell 76 cents to $75.68 a barrel, while U.S. crude dropped 40 cents to $66.42 . [O/R]

This story has not been edited by Firstpost staff and is generated by auto-feed.


Updated Date: Oct 25, 2018 05:05 AM

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