Asian indices down for second day tracking United States sell-off
- Author: Anthony Vega Feb 07, 2018,
Feb 07, 2018, 1:26
People monitor a stock index board at a bank in Bangkok, Thailand, February 6, 2018.
Market players are closely watching whether USA equities will fall further, said an official of a foreign exchange margin trading service firm.
By early afternoon in Asia, Dow and S&P futures were both down more than 4 percent, suggesting a weak open for USA markets.
A Big Drop In U.S. Financial Markets Drags Down Others Monday's plunge, 1,175 points as measured on the Dow Jones Industrial Average, has affected global markets.
The Nikkei 225 fell the most since 2015 and trading volume was more than double the 30-day average. By late morning it was down 5.2 percent at 21,511.04. The indexes in South Korea, Singapore and Australia were down by about 3.1 percent.
The turnover on the second trading day of the week came to 5,648.3 billion yen (51.79 billion USA dollars). A weaker dollar and stronger yen tend to hurt prices of export-oriented manufacturers in Japan.
"There is weakness across various equity sectors, but none so large the market is likely to fall through them".
Sony lost 4.0 percent to 5,345 yen and Nintendo plunged 4.60 percent to 44,750 yen. The S&P 500, for example, is one of the major fallers, declining 7.8 percent since its latest record high on January 26. For many traders, that was a sign that the Fed will have to pick up the pace of its rate hikes higher wages have the capacity to fuel inflation.
The Tokyo market accelerated its downswing in the afternoon as market players stepped up selling to avoid further losses, with the Nikkei briefly giving up over 1,600 points. Dow futures are now pointing to a drop of more than 500 points, or 2.1%.
Bond prices rose. The yield on the 10-year Treasury fell to 2.73 percent.
Global markets fell sharply on Tuesday following a volatile day in US trading, renewing questions about whether the long-running global stock rally is heading for a rout and potentially testing President Donald Trump. It was by far the index's biggest ever point decline for a single trading day.
The slide Monday brought the Dow back below 24,000 points.
The domestic market are expected to witness a gap-down opening, falling for sixth straight session as global markets extended losses, following a severe crash on Wall Street. It was down 872, or 3.4 percent, to 24,651.
"The unprecedented downfall in Dow yesterday (Monday) and combination of other negative factors like the high fiscal deficit projected and proposal on LTCG and fear of the stand that the RBI (Reserve Bank of India) will take during Wednesday's review has led to this melt-down or selling panic", Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.
With the "safe haven" yen appreciating against the US dollar, exporters lost ground, with Hino Motors falling 5.7 percent, to 1,433 yen, while Toyota Motor dropped 2.9 percent to finish the day at 7,286 yen.
The Nasdaq composite added 84 points, or 1.2 percent, to 7,052. "The only thing that is really different is that bond yields got up to 2.8 per cent".