Asian shares tumbled after a sudden U.S. technology stock selloff. The market seems ripe for investment, but experts are warning investors to be cautious. While Asian stocks took a blow, a looming political showdown in the U.K. has put the pound on the decline. Investors are also keeping an eye on France’s controversial parliament election. Despite the growing political suspense in Europe, commodities are on the rise. Oil & gold both made valiant comebacks as favorable developments emboldened trade. It’s been another wild week, & it isn’t going to settle anytime soon!
Asian Shares Slipped While Commodities Recovered
Friday’s massive selloff of U.S. technology stocks wreaked havoc on Asian stocks. Multiple oriental tech giants took a hit as investors scrambled to sell their shares. This sudden panic was sparked by Goldman Sachs Group Inc’s global chief investment officer Robert Boroujerdi’s grim message to investors. He warned that low volatility is distracting them from growing risks from cyclicality & regulation. This caused a major selloff that is still in progress even though it has slowed down considerably.
Once investors started selling shares, Asian technology companies experienced major losses. Out of all the tech companies, Samsung Electronics Co. was hit the hardest with a 1.7% loss. This caused a ripple effect that was felt throughout Asian stocks. South Korea’s Kospi lost a staggering 0.8%, while Japan’s Nikkei 225 Stock Average backpeddled by 0.7%. Japan’s Topix was also hit hard, losing a whopping 0.2%.
This sudden loss in Asia had a profound effect on U.S. stocks. The S&P 500 Index dropped by 0.1%, while the benchmark gauge fell by an equal amount. In total the Nasdaq 100 slipped 2.4%, while stock futures joined the decline. A slew of major American tech companies reported major losses, sending the tech-heavy Nasdaq Composite Index 1.8% lower. Out of the group Apple lost 3.9% while Amazon, Microsoft & Facebook all lost over 2%.
While stocks continued to decline, currencies reacted differently to growing political tensions. The South Korean won lost 0.3% as the Bank of Korea announced that it was planning to adjust easing. This came on the heels of Governor Lee Ju-yeol’s prepared statement for the bank’s 67th anniversary. In the middle of the controversy the yen added 0.1%, setting it at 110.23 per dollar. The pound shuddered as Theresa May prepared to meet with Tory lawmakers to discuss the fate of her presidency. It lost 0.1%, following up a 1.6% loss earlier in the week.
Faced with growing political tensions, commodities continued to improve. Gold enjoyed a 0.2% gain, putting it at $1,268.68 an ounce. This was a welcome surprise, pulling it out of 3 days of declines. West Texas crude joined gold with a 0.6% comeback. This set it at $46.12 a barrel after it weathered last week’s whopping 4% loss.
In the end, the market is reacting well to the current political turmoil. Even though investors are skittish, the surprise recovery of commodities is emboldening investors. All that’s needed is a little more encouragement & the market will continue to adapt positively.