Asian shares were mixed Friday following a selloff of technology shares on Wall Street.
“Big tech stocks might have seemed like safe havens, but they have found themselves at the center of a brutal sell-off,” said Stephen Innes, chief global market strategist at AxiCorp.
Japan’s benchmark Nikkei 225 (JP:NIK) recouped early losses to rise 0.3% in morning trading. South Korea’s Kospi (KR:180721) dropped 0.8%, while Australia’s S&P/ASX 200 (AU:XJO) lost 0.9%. Hong Kong’s Hang Seng (HK:HSI) gained 0.3%, while the Shanghai Composite (CN:SHCOMP) fell 0.2%. Stocks were down in Taiwan (TW:Y9999) , Singapore (SG:STI) and Indonesia (ID:JAKIDX) .
Shares of Anglo-Australian mining giant Rio Tinto (AU:RIO) fell after CEO Jean-Sebastien Jacques announced he will leave the company by March in the fallout over the destruction of Australian Indigenous sacred sites to access iron ore. By mutual agreement, Jacques will step down once a replacement has been appointed or on March 31, whichever happens sooner, the statement said.
Concerns about the coronavirus pandemic and the big hope over a vaccine in the works overshadow the global market, analysts say. While Big Tech is benefiting from the shift to online life that the pandemic and ensuing stay-at-home economy has accelerated, critics said their stocks prices shot too high.
The catch is that progress in curbing COVID-19 could hurt technology shares, Innes said.
“But keep your eye on the prize. A virus vaccine is a key to the second leg of growth recovery, which will be globally-coordinated and could run for a while as doses are distributed gradually,” he said.
The latest gyrations on Wall Street followed a wild stretch where the S&P 500 careened from its worst three-day slump since June to its best day in nearly three months.
The selling came as the odds lengthen that Congress will deliver more aid to the economy before November’s elections, support that many investors say is crucial after federal unemployment benefits and other stimulus expired. Partisan disagreements on Capitol Hill have kept Congress at a seeming impasse.
Nicholas Mapa, senior economist at ING, said risk aversion was dominating Asian trading with the technology sector weighing on overall sentiment.
“Investors are struggling to find a catalyst to reverse the recent downtrend with the much-anticipated U.S. fiscal stimulus bill still in limbo,” he said.
Tech stocks accounted for the biggest share of the broad selloff on Wall Street. The sector has been at the center of the market’s swings, hurt by criticism that their recession-defying surge in recent months was overdone.
The S&P 500 (SPX) fell 59.77 points to 3,339.19, its fourth decline in five days. The index is on pace for its second straight weekly loss. The Dow Jones Industrial Average (DJIA) dropped 405.89 points, or 1.5%, to 27,534.58. The Nasdaq (COMP) gave up 221.97 points to 10,919.59. The Russell 2000 index of smaller company stocks lost 18.73 points, or 1.2%, to 1,507.75.
Benchmark U.S. crude (CLV20) inched down 1 cent to $37.29 a barrel. Brent (UK:BRNX20) , the international standard, fell 9 cents to $39.97 a barrel.
The U.S. dollar (USDJPY) inched up to 106.19 Japanese yen from 106.13 yen.
Video: Wall Street ends lower as tech stocks slide (Reuters)