US tech gloom triggers Monday blues
Friday’s gloom in US markets, triggered by a sell-off in technology shares, engulfed Asian stocks on Monday and Indian shares were no exception, as global investors turned wary of risk. The mood was also cautious ahead of the US Federal Reserve’s two-day policy meeting on Tuesday and Wednesday.
WHAT THE FAAMG
US equities tumbled on Friday after Robert Boroujerdi, global chief investment officer at Goldman Sachs Group Inc., warned that low volatility in shares of Facebook Inc., Amazon.com Inc., Apple Inc, Microsoft Corp. and Google parent Alphabet Inc. may be blinding investors to risks such as cyclicality and regulation, according to a Bloomberg report. There were concerns that the situation was similar to the tech bubble that burst in 1999-2000. These five companies—for which Goldman Sachs has coined the acronym FAAMG—erased a collective $97.4 billion from their market value. In reaction, the S&P 500 Information Technology Sector GICS Level 1 Index tumbled 2.7%.
ASIA AFFECTED
The negative sentiment spread to Asian and European stocks when trading opened on Monday. Hong Kong’s Hang Seng index fell 1.24% and Japan’s Nikkei index shed 0.52%. India, too, was not immune. If anything, this was a good excuse for the market to consolidate after repeatedly hitting new highs in the past few weeks. Key equity indices closed lower on Monday as global sentiment weighed. The Nifty breached 9,600 points before closing at 9,616.4 points, 0.49% lower.