Asian stocks fall as US tech sinks, bonds steady

SYDNEY: Stocks in Asia declined after weakness in some of the biggest technology companies sent US stocks tumbling, adding to pessimism about a breakthrough in trade tensions.

Equities fell from Tokyo to Sydney as S&P 500 Index futures extended losses.

Earlier, US software developers and semiconductor manufacturers led the US gauge lower Monday amid a myriad of concerns swirling around the tech sector.

Japanese automakers were under pressure with Nissan Motor Co tumbling after the arrest on misconduct allegations of the carmaker’s chairman Carlos Ghosn. The dollar and Treasuries were little changed.

In the US session, the Nasdaq 100 Index plunged more than 3% to the lowest since April.

Apple Inc slumped on signs of slowing demand for iPhones, while Facebook Inc’s public image continued to weigh on its share price.

Chipmaker Nvidia Corp plunged almost 28% in two days after disappointing earnings, sending shock waves through chipmakers.

Investors are reassessing their expectations after several weeks of volatility spurred by fears of an escalation of the trade conflict and a slowing global economy.

Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund firm, said that investors should expect low returns for a long time after years of low interest rates and quantitative easing have squeezed most of the returns out of assets in the United States.

Meanwhile, optimism that relations between the United States and China would improve at Group-of-20 meetings starting next week, dissipated.

“A breakthrough is really about slowing down the pace of tariffs or potentially not allowing the US$200bil to move at year end up to a 25% tariff from a 10% tariff,” Darrell Cronk, president at Wells Fargo Investment Institute, said on Bloomberg TV.

“Just an agreement to restart discussions and negotiations in the next year the markets would perceive as strong, positive and good for risk assets.”

Elsewhere, the pound stabilised as UK Prime Minister Theresa May appealed to business leaders to help deliver her Brexit deal, and Gibraltar emerged as a fresh sticking point. Bitcoin fell below US$5,000 for the first time since October 2017.

Crude traded around US$57 a barrel.