(Bloomberg) — Stocks in Asia fell following a sell-off in the U.S. as disappointing prospects from Europe’s most valuable technology company and concerns about tighter U.S. restrictions on chip sales hit the sector driving the bull market.
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Stock benchmarks in Sydney, Tokyo and Seoul all fell, while contracts pointed to a decline in Hong Kong. Futures on the S&P 500 are little changed after the benchmark fell 0.8% on Tuesday. Treasury bonds were steady, while oil regained some gains in early trading after Tuesday’s plunge.
Asian semiconductor stocks including SK Hynix Inc. and Samsung Electronics Co Ltd., fell on Wednesday after Dutch giant ASML Holding NV booked only about half the orders analysts expected in the past three months and cut its outlook for next year. In the US, Nvidia Corp. lost. 4.7%, reflecting a surprising slowdown for key drivers in the semiconductor industry.
“U.S. equity markets, which are trending more toward large-cap leadership, are seeing profit taking today as earnings season gets underway versus the overbought/extended charts,” said Dan Wantrobski of Janney Montgomery Scott.
The S&P 500 fell to about 5,815 points and the Nasdaq 100 lost 1.4%. The dollar stabilized after climbing to its highest level in about two months as former President Donald Trump defended proposals to dramatically increase tariffs on foreign imports. The yield on ten-year government bonds fell by seven basis points on Tuesday.
Investors became so bullish that it may be time to sell global stocks, according to a Bank of America Corp. investor survey. Allocations to equities soared, while exposure to bonds fell and cash levels in global portfolios fell to 3.9% in October from 4.2% last year. This led to a “sell signal,” strategists led by Michael Hartnett wrote.
Back in Asia, traders will be keeping an eye on Chinese shares after the housing minister announced a press conference on Thursday expected to provide more details on support measures for the property sector. A gauge of US-listed Chinese stocks fell almost 6%, while the CSI 300 index lost more than 3% on Tuesday as doubts about Beijing’s stimulus measures resurfaced.
Elsewhere, yields on New Zealand dollars and government bonds fell after annual inflation fell sharply in the third quarter, returning to the central bank’s target range for the first time in more than three years.
Meanwhile, three of Southeast Asia’s largest economies will unveil monetary policy decisions later Wednesday. Indonesia and Thailand are expected to leave interest rates unchanged, while the Philippines will see a reduction.
Main events this week:
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Morgan Stanley earnings, Wednesday
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ECB interest rate decision, Thursday
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US retail sales, unemployment claims, industrial production, Thursday
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Fed CEO Austan Goolsbee speaks Thursday
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China’s GDP, Friday
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The US housing market starts on Friday
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The Fed’s Christopher Waller and Neel Kashkari will speak Friday
Some of the major moves in the markets:
Stocks
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Futures on the S&P 500 were little changed at 9:25 a.m. Tokyo time
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Hang Seng futures fell 1.3%
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Japan’s Topix fell 0.5%
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Australia’s S&P/ASX 200 fell 0.4%
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Euro Stoxx 50 futures fell 1.6%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0884
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The Japanese yen was little changed at 149.17 per dollar
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The offshore yuan was little changed at 7.1359 per dollar
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The Australian dollar fell 0.4% to $0.6679
Cryptocurrencies
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Bitcoin rose 0.5% to $66,838.63
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Ether rose 1% to $2,598.78
Bonds
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The yield on 10-year government bonds was little changed at 4.04%
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The Japanese ten-year yield fell by 1.5 basis points to 0.955%
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Australian ten-year yields fell five basis points to 4.21%
Raw materials
This story was produced with the help of Bloomberg Automation.
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