Asian markets fell on Friday after Wall Street had its worst day since June, as investor enthusiasm shattered after a series of record highs.
Nikkei 225 NIK,
-1.19%
fell 1%, while Hang Seng HSI,
-1.82%
in Hong Kong lost 1.3%. Australian S & P / ASX 200 XJO,
-2.98%
lost 2.7% and the Shanghai Composite SHCOMP index,
-1.38%
fell by 1%. South Korean Kospi 180721,
-1.62%
fell 1.6%, while benchmarks in Taiwan were 9,999 yen,
-1.26%
, Singapore STI,
-1.48%
, Malaysia FBMKLCI,
+ 0.06%
and Indonesia JAKIDX,
-1.24%
refused.
Regionally, little could have changed the trajectory of the market after the US benchmark S&P 500 lost 3.5%, its biggest loss in three months, and the Nasdaq fell 5% as high-tech companies crashed after months impressive growth.
There seemed to be no clear catalyst for a sell-off, as economic data was doing roughly the way the market expected and no company issued ominous warnings. But analysts say the market needs a break.
There is still a lot of money circulating through financial systems as the Federal Reserve and many other central banks free up huge amounts of cash by buying bonds, while keeping interest rates ultra-low.
“While I don’t think this is a healthy bust, getting rid of some short-term speculative foam will offer higher levels for a Money Wall to be indulged in as we know the Fed isn’t going anywhere anytime soon,” AxiCorp’s Stephen Innes said in a comments.
The Wall Street dump of tech stocks on Thursday ended with Apple’s AAPL.
-8.00%
drop by 8%. Amazon AMZN,
-4.62%
lost 4.6% and Facebook FB,
-3.76%
returned 3.8%.
Investors were betting that these companies would continue to make huge profits as people spend even more time on the Internet with their devices during the pandemic. They also attributed high market value to new favorites like Zoom Video Communications, as many Americans work remotely and students study online.
Even with losses on Thursday, Apple still grew 64.7% year-over-year, and Amazon 82.3%. Zoom continues to grow at a whopping 460.4% year over year.
“There really is very little excuse (the rise of these stocks) other than euphoria,” said Mark Hackett, head of investment research at Nationwide.
The profit was based on “very optimistic assumptions” about the impact of the virus on the economy, as well as the outlook for Congress and the White House offering another economic aid package.
The number of Americans applying for unemployment benefits fell to 881,000 last week, slightly better than economists expected, but companies are still letting out workers in numbers far in excess of the Great Recession. Thus, the job picture remains extremely grim, with tens of millions of Americans still jobless.
Investors will be paying close attention on Friday when the Labor Department releases its job report for August. Economists polled by FactSet forecast that the US economy created 1.4 million jobs in August, up from 1.74 million jobs in July.
Dow Jones Industrial Average DJIA,
-2.77%
fell 2.8% to 28,292.73. A day earlier, it exceeded 29,000 points for the first time since February.
S&P 500 SPX Index,
-3.51%
lost 125.78 points and closed at 3,455.06. High-tech Nasdaq COMP,
-4.96%
fell 598.34 points to 11,458.10.
In energy trading, the American benchmark for crude oil CLV20,
-0.94%
dropped from 29 cents to $ 41.08 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, it lost 14 cents to $ 41.37. Brent BRNX20 oil,
-0.93%
, the international standard, was down 28 cents to $ 43.79 a barrel.
USDJPY dollar,
-0.01%
fell to 106.16 yen from 106.18 yen late Thursday.
