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Asian Markets React to Tech Selloff and Economic Concerns
SINGAPORE – Asian stock markets and global futures experienced a downturn on Wednesday following a significant selloff in the technology sector. The U.S. dollar and Japanese yen increased as investors sought safer assets, while U.S. Treasury yields saw a slight decrease amid growing unease about the future of the American economy.
Oil prices faced pressure, lingering close to their lowest levels in recent months, as negotiations aimed at resolving a stalemate affecting Libyan crude production and exports began to take shape.
Brent crude futures decreased by 0.05%, settling at $73.71 per barrel, while U.S. crude futures dropped by 0.13% to $70.25 per barrel. Both benchmarks had reached their lowest points since December in the previous trading session.
On Wall Street, shares closed sharply lower the previous night after the U.S. markets reopened following a holiday. Notably, Nvidia, a leader in artificial intelligence, saw its stock plunge nearly 10% as investor enthusiasm for AI technologies cooled.
This disappointing performance led to a negative opening in Asia, with MSCI’s index tracking Asia-Pacific shares outside of Japan declining by 0.44% during early trading hours. Similarly, U.S. stock futures continued to trend downwards, with the S&P 500 futures falling by 0.1% and Nasdaq futures retreating by 0.15%.
The Japanese Nikkei index took a heavier hit, dropping over 3% as regional sentiment soured.
Historically, September has been a challenging month for equities, and analysts point to several contributing factors for the current market downturn, including lackluster manufacturing data from the U.S.
Chris Weston, head of research at Pepperstone, remarked, “September began with heightened activity, and the trend of portfolio de-risking was evident as the U.S. markets resumed operations after Labor Day.”
He further stated, “Concerns regarding economic growth dominated the day, with cyclical assets suffering losses and investors aggressively laying down hedges.”
This week will see a barrage of economic reports from the U.S., including updates on job openings and claims for unemployment benefits, culminating in the key nonfarm payrolls report to be released on Friday.
The outcome of this report could significantly influence the Federal Reserve’s upcoming policy decisions, particularly regarding the anticipated interest rate cut this month, which could vary in scale depending on labor market conditions.
In the currency market, safe-haven assets like the dollar and yen gained traction, with the Japanese yen slightly increasing to 145.36 per dollar. The euro saw a decline from its recent 13-month peak, remaining relatively stable at $1.1048, while the British pound fell 0.04% to $1.311.
Meanwhile, spot gold prices crept up by 0.05% to $2,494.23 per ounce.
Source
finance.yahoo.com