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Mettis Global News
Mettis Global News
Mettis Global News

MPS Preview: High for Longer

Global equities down as action against Chinese investment in tech sparks a sell-off

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Asian markets got on with their day amid a dull spell yet again after a tech sell-off spread from the US. The Asian markets started divesting their positions in the tech stocks triggered by their counterparts in the US.

The Bloomberg in a news send out warned of a 200 days of pain to investors, as such a fall usually takes more than 25 weeks to recover. Global markets have been marred by a flurry of bad news over the course of last few months.

Despite the confirmation from the Chinese Premier that the North Korean President had indeed visited China and announcing that the North Korean regime is on track of “committing to denuclearization”

The tech sell-off in the Asian Markets, originally triggered by the US investors came as a result of series of issues. The situation was made worse by reports that US was considering imposing a crackdown on Chinese investment in technology companies.

The Dow and S&P 500 plunged. And the tech-rich Nasdaq slumped almost three percent with Facebook 4.9 percent down as it is battered by a huge data breach scandal, while Tesla shed more than eight percent on a probe into the fatal crash of one of its cars, according to APP.

Twitter was hammered 12 percent by talk of a regulatory hit and Google parent Alphabet sank 4.6 percent on worries about a possible massive lawsuit from Oracle.

The selling continued in Asia, with South Korea's Samsung, Japanese giant Sony and Hong Kong-listed Tencent all down more than two percent.

On broader markets Hong Kong fell one percent, Shanghai fell 0.6 percent and Tokyo ended the morning 1.8 percent lower.

Sydney lost 0.5 percent and Singapore gave up 0.9 percent.

Seoul fell more than one percent, with traders unmoved by news from China that North Korea's Kim had visited — marking his first foreign trip since becoming leader in 2011 and causing fresh hope for an easing of tensions on the peninsula.

The losses are the latest in a series of swings in global equities since early February, when fears about rising US interest rates spooked investors.

Markets were then sent into spasms this month when Trump imposed tariffs on steel and aluminium imports, then followed up Thursday with levies on $60 billion of other goods from China over intellectual property issues — sparking talk of a trade war.

Those fears were soothed somewhat — and markets bounced back — as it emerged high-level talks had been taking place between the world's top two economies to find an agreement on tariffs.

However, “the uncertainty over US protectionism isn't going to fade anytime soon” warned Stephen Innes, head of Asia-Pacific trading at OANDA.

“And while investors should enjoy the small win on the tariff front, they'll be best served to prepare for a long, drawn out, and perhaps more rancorous, dialogue between the US and China when it comes to intellectual property rights. Best get used to the new normal.”

On currency markets the dollar was up against most high-yielding currencies and the yen.

But it extended losses against the euro on talk the European Central Bank is heading towards winding in its crisis-era stimulus, while the pound was supported by hopes London and Brussels are edging closer to a less-painful Brexit deal than previously feared.

Tokyo – Nikkei 225: DOWN 1.8 percent at 20,939.59 (break)

Hong Kong – Hang Seng: DOWN 1.0 percent at 30,476.37

Shanghai – Composite: DOWN 0.6 percent at 3,147.33

Dollar/yen: UP at 105.61 yen from 105.36 yen at 2100 GMT

Euro/dollar: UP at $1.2413 from $1.2402

Pound/dollar: UP at $1.4184 from $1.4159

Oil – West Texas Intermediate: DOWN 39 cents at $64.86 per barrel

Oil – Brent North Sea: DOWN 36 cents at $69.75 per barrel

New York – Dow: DOWN 1.4 percent at 23,857.71 (close)

London – FTSE 100: UP 1.6 percent at 7,000.14 (close)

Posted on: 2018-03-28T10:57:00+05:00