Stock markets slump as volatile week ends with tech selloff

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MG News | October 26, 2018 at 11:25 PM GMT+05:00

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London, Oct 26: Equity markets suffered another downturn Friday with tech stocks pummelled after US titans Amazon and Google-parent Alphabet missed key earnings targets, analysts said.

Geopolitics, Italian debt concerns and Brexit worries clouding the outlook for the global economy also helped pull the rug from under investors' feet, they said.

Fresh hefty losses came at the end of a hugely volatile trading week that has wiped out all 2018 gains for some markets.

"Risk aversion is alive and kicking on Friday, as weaker than expected tech earnings trigger the latest stampede and those still buying the dips once again get burned," said Craig Erlam at Oanda.

Amazon and Alphabet shares tumbled in morning New York business, helping to push the tech-heavy Nasdaq well over two percent lower, while the Dow fell around 1.5 percent.

- 'Nervous wreck' -

"Tech companies have raised the bar so high in recent years that the numbers reported by Amazon and Alphabet just weren't quite spectacular enough, not at a time when investors are a nervous wreck and fleeing for safety at the first sign of danger," he said.

The earnings reports added to already "skittish global sentiment", analysts at Charles Schwab said, and overshadowed earlier news of stronger-than-expected US growth in the third quarter.

The euro recovered against the dollar after posting a fresh two-month low point Thursday amid concerns over Italy's debt pile.

S&P Global is to deliver an update on Italy's debt ratings after the markets close Friday.

The dollar meanwhile struck a decade-high at 6.9682 against the yuan as US-China trade tensions rumble on.

Sterling hit a two-month low point under $1.28 ahead of Britain's annual budget announcement Monday, the last before the country exits the EU in March, but the pound recovered somewhat in the late European afternoon.

Following losses at the start of the week, stock markets showed signs of recovery Thursday before diving once more ahead of the weekend break.

- 'Dead cat bounce' -

"Any hope that Thursday's recovery was anything more than a dead cat bounce was short-lived," said Erlam.

Both Amazon and Alphabet reported big jumps in quarterly profit but Amazon's sales forecast for the critical holiday-shopping quarter disappointed analysts. Alphabet's revenues in the just-finished quarter also lagged forecasts.

Amazon plummeted 9.2 percent while Alphabet slumped 4.8 percent.

Asian investors also took flight Friday, with Hong Kong's main index closing down 1.1 percent, while Tokyo ended 0.4-percent lower and Shanghai gave up 0.2 percent.

Singapore dived 1.4 percent and Seoul shed 1.8 percent. However, Wellington was marginally higher and Manila added more than one percent.

- Key figures around 1540 GMT -

  • London - FTSE 100: DOWN 1.4 percent at 6,906.09 points (close)
  • Frankfurt - DAX 30: DOWN 0.9 percent at 11,200.62 (close)
  • Paris - CAC 40: DOWN 1.3 percent at 4,967.37 (close)
  • Milan - FTSE MIB: DOWN 0.7 percent at 18,683.27 (close)
  • EURO STOXX 50: DOWN 0.9 percent at 3,134.89
  • New York - Dow: DOWN 1.5 percent at 24,606.88
  • Tokyo - Nikkei 225: DOWN 0.4 percent at 21,184.60 (close)
  • Hong Kong - Hang Seng: DOWN 1.1 percent at 24,717.63 (close)
  • Shanghai - Composite: DOWN 0.2 percent at 2,598.85 (close)
  • Euro/dollar: UP at $1.1379 from $1.1375 at 2100 GMT
  • Pound/dollar: UP at $1.2831 from $1.2817
  • Dollar/yen: DOWN at 111.59 from 112.37 yen
  • Oil - Brent Crude: UP 35 cents at $77.24 per barrel
  • Oil - West Texas Intermediate: DOWN 5 cents at $67.27

 

(AFP/APP)

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