Bangkok, Nov 5: Shares in Europe and Asia retreated on Wednesday following a decline on Wall Street spurred by the selling of Big Tech shares.
But benchmarks in Asia recovered much of the ground lost earlier in the day, when Tokyo’s Nikkei fell nearly 5 per cent. It recovered to close 2.5 per cent lower, at 50,212.27.
In early European trading, Germany’s DAX gave up 0.7 per cent to 23,777.85, while the CAC 40 in Paris shed 0.4 per cent to 8,039.32. Britain’s FTSE 100 edged 0.1 per cent lower, to 9,707.18.
The future for the S&P 500 slipped 0.1 per cent, while that for the Dow Jones Industrial Average edged 0.1 per cent higher.
The spillover from Wall Street was evident. Shares in energy and tech giant SoftBank Group sank 10 per cent on jitters over its investments in artificial intelligence. Computer chip maker Tokyo Electron dropped 4.1 per cent, while stock in Advantest Corp., a maker of semiconductor testing equipment, lost 6 per cent.
Toyota Motor Corp. lost 3.7 per cent. The company reported a 7 per cent decline in its profit for the April-September period, but raised its earnings forecast for the year, despite US President Donald Trump’s higher tariffs on imports of autos and auto parts.
South Korea’s Kospi declined 2.9 per cent to 4,004.42 as Samsung Electronics shed 4.1 per cent. SK Hynix, which had logged major gains thanks to plans to develop artificial intelligence with chip maker Nvidia, lost 1.2 per cent.
Chinese markets wavered between gains and losses. The Shanghai Composite index recovered from modest earlier losses to edge 0.2 per cent higher, to 3,969.25. Hong Kong’s Hang Seng declined 0.1 per cent to 25,935.41.
Investors apparently took fright from the heavy selling of high-tech related shares overnight on Wall Street. The technology sector has been driving gains this year, and huge values for companies including Nvidia and Microsoft give them outsized influence over the broader market’s direction.
The price of gold, which tends to climb in times of uncertainty, jumped 0.8 per cent to USD 3,990.90 an ounce.
“The rally that began in April is finally feeling its age. What we are seeing today wasn’t just a dip; it was a full-scale reality check,” Stephen Innes of SPI Asset Management said in a commentary.
“This wasn’t the usual intraday shake-out. It felt more like the oxygen suddenly thinning at the top of a mountain that everyone assumed had no summit,” he said.
Palantir Technologies, which creates software platforms for data, fell 7.9 per cent despite reporting results that beat analysts’ forecasts. Chip maker Nvidia also reversed course from a day earlier, falling 4 per cent, while Microsoft fell 0.5 per cent.
Other sectors also declined, leading the S&P 500 to give up 1.2 per cent. The index is still up more than 15 per cent for the year.
The Dow Jones Industrial Average dropped 0.5 per cent, and the technology-heavy Nasdaq fell 2 per cent.
Wall Street remains focused on corporate earnings. Roughly three out of every four companies within the S&P 500 have reported their latest results, and most have been better than analysts expected.
Several big companies will report their latest financial results later this week, including McDonald’s, Expedia Group and Qualcomm.
The latest round of corporate profit reports and forecasts has taken on more significance for Wall Street due to the US government shutdown. Investors and economists are trying to gauge the health and direction of the US economy without the latest economic updates on inflation and employment.
Outside of earnings, Tesla fell 5.1 per cent after Norway’s sovereign wealth fund, one of the electric car maker’s biggest investors, said Tuesday that it will vote against a proposed compensation package that could pay CEO Elon Musk as much as USD 1 trillion over a decade.
In other dealings early Wednesday, US benchmark crude oil lost 14 cents to USD 60.42 per barrel. Brent crude, the international standard, shed 14 cents to USD 64.29 per barrel.
The dollar fell to 153.53 Japanese yen from 153.66 yen. The euro rose to USD 1.1495 from USD 1.1482. (AP)
