Asia stocks back from the brink as Wall Street bounces

Adjust Comment Print

The Dow Jones Industrial Average dropped as much as 500 points at the open of USA markets. A topsy-turvy session for the S&P 500 Index advancing 1.7 percent on Tuesday. The broad-based S&P 500 gained 0.7 percent to 2,668.43, while the tech-rich Nasdaq Composite Index climbed 0.7 percent to 7,017.87. Index heavyweights such as Tencent Holdings and HSBC Holdings led the gains, while the H-share index, which comprises major mainland companies listed in the territory, also opened 3.2% higher.

The benchmark Dow even briefly dipped into a correction phase within minutes of the markets opening - a 10 percent decline from its 52-week high - following a worldwide sell-off that saw $4 trillion wiped off the global market. After the sharp losses over the past three days, the S&P 500 is down 8.4 percent from the recent record high it set on January 26.

A 10 percent drop from a peak is referred to on Wall Street as a "correction".

This is due to inflation fears after strong United States jobs data at the end of last week that triggered a surge in bond yields and led to sell-off across USA stock markets.

Craig Erlam, senior market analyst at OANDA, notes that the rally over the last couple of years has been "very strong and without any corrections of note". Gainers included technology companies, retailers like Amazon and Home Depot, and industrial companies and banks. Retailers including Amazon and Home Depot made small gains, a possible sign of confidence the USA economy will keep growing. Friday's U.S.jobs report showed wages grew at a faster pace in January, and investors anxious that that means inflation is speeding up, and that the Federal Reserve will have to raise interest rates faster than previously expected in order to keep that inflation in check.

Meantime, oil rose after three days of declines as an industry report was said to show an unexpected decline in USA crude stockpiles. "There's genuine carnage out there", said Chris Weston, chief market strategist at IG in Melbourne, Australia. The impact of the 6.4-magnitude natural disaster that hit the island's east coast late Tuesday night appears to be limited, as far as the market is concerned.

Cleveland Cavaliers still in the mix for DeAndre Jordan and George Hill
Since Jan. 15, Cleveland has allowed at least 100 points in all but one of their 11 games. No one swindles The Logo, not even The King on his finale season in Cleveland.

That could be painful for markets that have been propped up by central banks' stimulus for many years.

Japan's Nikkei 225 Stock Average plunged by more than 7 percent in early trading on Tuesday, suffering its biggest one-day points drop since 1990.

Japan's benchmark Nikkei 225 index fell more than 1,500 points at its lows on Tuesday, but the benchmark pared some of those losses ahead of its close. The Nasdaq composite lost 52 points, or 0.7 percent, to 7,189. The contract dropped $1.60, or 2.5 percent, to finish at $61.79 a barrel on Wednesday. Bond prices jumped after a steep decline on Friday.

The Russell 2000 is down 39.30 points, or 2.5 percent. US crude oil fell 36 cents to $63.79 a barrel in NY. Brent crude, the global standard for oil prices, dropped 5 cents to $65.46 per barrel in London.

In currencies, investors found safe harbour in the Japanese yen while riskier plays such as the Australian and New Zealand dollars declined.

Comments