U.S. Tech Selloff Spills Over Into Global Markets

U.S. Tech Selloff Spills Over Into Global Markets

International markets fell, after a third straight session of declines in New York, but futures suggested U.S. stocks might regain some poise.

By late Wednesday morning in Hong Kong, the city’s Hang Seng Index and China’s Shanghai Composite both stood 1.1% lower. Equity benchmarks in Australia, Japan and South Korea dropped 2.5%, 1.4% and 0.7% respectively. S&P 500 futures added 0.1%.

Falls in big technology stocks pushed the Nasdaq Composite Index down 4.1% on Tuesday. That took its losses over three sessions to 10.03%, pushing it into correction territory.

“The correction in the U.S. market really weighed on sentiment here,” said Ken Wong, a portfolio manager at Eastspring Investments in Hong Kong. Still, Mr. Wong said the pullback shouldn’t have come as too much of a surprise, given some stocks had doubled or tripled in value in a few months.

In Hong Kong, shares in

Meituan Dianping,

the operator of one of China’s biggest food-delivery apps, fell 3.3%, extending a recent reversal after huge gains earlier this year. Games and messaging giant Tencent lost 0.9%, while smartphone maker Xiaomi dropped 1.3%. Japan’s

SoftBank Group

dropped 4%, while

Taiwan Semiconductor Manufacturing Co.

shed 1%.

Falling oil prices and concerns about Brexit were also curbing risk appetite, Kerry Craig, global market strategist at J.P. Morgan Asset Management, said in a note.

But he said support from central banks and governments should underpin markets, even amid uncertainty about the U.S. election and development of coronavirus vaccines. On Tuesday,


PLC paused trials of a Covid-19 vaccine after the unexplained illness of a study participant.

Daniel Gerard, senior multi asset strategist at State Street Global Markets, said aside from easy monetary policy and the recent rally in technology stocks, there were few factors driving markets. That made them fragile, he said. “When people get anxious, it ripples through the system quite quickly.”

The most actively traded futures contract for Brent crude, the global oil benchmark, fell 0.6% to $39.56, while the equivalent for gold edged down 0.4% to $1,935 a troy ounce.

The yield on the benchmark 10-year U.S. Treasury note fell to 0.671%, from 0.682%. Bond yields fall as prices rise.

Write to Xie Yu at [email protected]

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