ASIA MARKETS SEE RED AFTER BLOODY WALL ST LOSS
HONG KONG: Asian stocks p lunged on Tuesday after a record- breaking loss on Wall Street, extending a global rout as panicked investors fret over rising US borrowing after months of market euphoria.
Tokyo led a collapse throughout percent before closing at 4.7 percent. Hong Kong was down more than 4 percent, and Sydney and Singapore each sank 3 percent. - mered, with a slump in oil prices yielding currencies have been hit
Dealers tracked their colleagues in New York, where the Dow suffered its worst points fall in history and wiped out all its 2018 gains, while the Standard & Poor’s 500 also took a beating to sit down for the year. (see related story on B1)
Global stocks have enjoyed months of surges fueled by optimism over the US economy, corporate earnings and the global outlook.
The winning streak was fanned by the passage of US President Donald Trump’s massive tax cuts bill in December, which led sevpay rises and bonuses.
At the same time, the economy continues to improve across the board.
Volatility warning
But while traders have been piling into equities, pushing many global indexes to record or multiyear highs, there has been growing
- evated US Treasury bond yields—at four-year highs—and the likelihood of fresh Federal Reserve (the Fed) interest rate increases.
Selling kicked in last Friday, increase in US jobs and a rally in wage growth, fueling fears that the Fed would be forced to raises rates more than expected.
The so- called Vix volatility index more than doubled in US trade on Monday.
Among other Asian markets, Seoul lost 1.5 percent, Taipei sank 3.4 percent.
Mumbai was 0.9 percent lower, Bangkok plunged 2.4 percent, and Jakarta and Kuala Lumpur were also down.
“How far it goes down? You tell me,” Steven Wieting, global chief investment strategist at Citigroup, told Bloomberg TV.
You cannot keep up this speed of decline “day after day after day
- tom rather quickly,” he added, predicting further volatility.
Energy companies were among the biggest victims, with Inpex los- ing more than 4 percent in Tokyo, Corp., PetroChina Co. Ltd. and China Petroleum & Chemical Corp. were down between 5 percent and 6.5 percent in Hong Kong.
Sydney-listed Woodside Petroleum was off nearly four three percent and BHP shed 2.7 percent.
Technology giants were also targeted after disappointing earnings reports from Apple and Google parent Alphabet. Tencent, Sharp and Samsung Electronics all got a bloody nose. yen— considered a go- to unit in times of turmoil and uncertainty— climbed against the dollar. The greenback, however, rose against the pound and euro, thanks to rate- increase expectations.
Bitcoin hammered
The commodity-dependent Australian dollar tanked 1 percent against its US counterpart, while South Korea’s won, Indonesia’s rupiah and the Mexican peso were among the other big losers. And bitcoin continued its spiral downward after some banks banned their customers from buying it with credit cards. The news is the latest to hit the cryptocurrency after recent crackdowns by authorities in India, South Korea, China and Russia.
The unit was down more than 20 percent to a three-month low below $6,000—less than a third of its value near $20,000 last December—which sparked warnings of a bubble. awash with red, analysts remained upbeat, saying the selling represented a much-needed correction.
“We believe this is a healthy correction in equity markets but also likely short-lived as the higher US 10-year yield is still not in the danger zone,” said Peter Garnry, head of equity strategy at Saxo Bank, who predicted a pullback last month.
“I actually think there’s buying opportunities. Maybe not today, but through this week, as this sell-off exacerbates,” said Sean Fenton, a portfolio manager at Tribeca Investment Partners in Sydney.