Asian markets skidded on Friday after Wall Street on Thursday had its worst day since June as investors’ exuberance faltered after a spate of record highs.
Shares fell across the region on Friday, with Tokyo’s Nikkei 225 shedding 1.1 percent.
There was little going on regionally to alter the market’s trajectory after the US benchmark S&P 500 gave up 3.5 percent, its biggest loss in three months, and the NASDAQ Composite fell 5 percent as high-flying technology companies took a tumble after months of spectacular gains.
There seemed to be no explicit catalyst for the selloff, with economic data coming in roughly where the market had expected and no companies issuing foreboding warnings.
However, the market felt due for a breather, analysts said.
“Altitude sickness?” Riki Ogawa of Mizuho Bank Ltd asked. “To be sure, the plunge after overly exuberant rallies of recent was in itself not counter-intuitive; but the precise motivation of, and triggers for, market moves remains an enigma.”
There is still plenty of money sloshing through financial systems, with the US Federal Reserve and many other central banks unleashing massive amounts of cash through bond purchases, while keeping interest rates ultra low.
“While I don’t think its a healthy meltdown, getting rid of some of the short-term speculator froth will offer up better levels for the Wall of Money to indulge as we know the Fed is not going anywhere soon,” Stephen Innes of AxiCorp Financial Services Pty wrote in a commentary.
The MSCI Asia-Pacific Index on Friday fell 1.22 percent to 171.33, down 1.6 percent for the week.
In Taipei on Friday, the TAIEX closed down 120.02 points, or 0.94 percent, at 12,637.95 on turnover of NT$230.537 billion (US$7.81 billion).
The Nikkei 225 on Friday shed 260.10 points to 23,205.4, paring its weekly gain to 1.4 percent.
The Hang Seng Index (HSI) fell 312.15 points, or 1.25 percent, to 24,695.45. The Hang Seng China Enterprises Index (HSCE) fell 0.56 percent to 9,883.98.
The sub-index of the Hang Seng tracking energy shares dipped 0.3 percent, while the IT sector fell 2.03 percent, the financial sector ended 0.93 percent lower and the property sector fell 1.49 percent.
For the week, the HSI retreated 2.9 percent, its worst week since the week of May 22, while the HSCE also declined 2.9 percent in its worst week since July 17.
India’s NIFTY 50 fell 1.7 percent on Friday, down 2.7 percent for the week. The SENSEX on Friday lost 1.6 percent, taking its weekly loss to 2.8 percent.
The Bursa Malaysia on Friday inched up 0.03 percent, but fell 0.7 percent for the week.
Manila’s PSE Composite Index on Friday gained 0.2 percent, but was down 0.7 percent weekly.
Australia’s S&P/ASX 200 on Friday gave up 3.1 percent to 5,925.50 and the Shanghai Composite Index slipped 0.9 percent to 3,355.37.
Wall Street’s unloading of technology shares on Thursday ended with Apple Inc plunging 8 percent. Amazon.com Inc lost 4.6 percent and Facebook Inc gave back 3.8 percent.
Investors have been betting those companies would keep making huge profits, as people spend even more time online with their devices during the COVID-19 pandemic, making new market darlings of companies like Zoom Video Communications Inc, as many Americans work remotely and students learn online.
The gains have been based on rosy assumptions about the virus’ impact on the economy, as well as on prospects for the US Congress and the White House coming up with another economic relief package.
The number of Americans who applied for unemployment benefits fell last week to 881,000, slightly better than what economists had expected, but companies are still letting workers go at numbers well above those seen in the Great Recession.
The jobs picture remains extremely bleak, with tens of millions of Americans still unemployed.
Additional reporting by CNA, with staff writer
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