TOKYO, Sept 8 — US stock futures and Asian shares regained some footing today following a small bounce in European shares as investors looked to whether high-flying US tech shares could recover from their recent rout.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent while Japan’s Nikkei gained 0.4 per cent. US financial markets were shut yesterday for a public holiday while Europe’s STOXX 600 index was 1.7 per cent higher.
Globally traded US S&P500 futures erased their Monday losses to trade 0.6 per cent higher. Tech shares remained more fragile, however, with Nasdaq futures standing flat after having lost more than 6 per cent late last week.
While many market players say they cannot pinpoint a single trigger for the Nasdaq’s sudden plunge, valuations have been stretched after its gain of 75 per cent from a bottom hit in March.
Tesla, the poster child of the euphoria in US big technology stocks with a year-to-date gain of a whopping 400 per cent, looks set to fall after it was excluded from a group of companies that were being added to the S&P 500.
It lost 6.5 per cent in after-hours trade on Friday and fell 2.7 per cent in Frankfurt yesterday.
“Those tech shares were becoming expensive so I would see their latest fall as a healthy correction,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
Risk assets also face headwind from creeping doubts that US policymakers may not be willing to compile massive stimulus as some traders had hoped for.
“The headline figures from Friday’s US jobs data were pretty good, so that could lead to speculation policymakers may no longer be eager to dole out trillions of dollars to support the economy,” said Masahiko Loo, portfolio manager at AllianceBernstein.
“Markets may have gone too far in expecting the Federal Reserve to announce more easing steps this month,” he said, adding receding expectations is one reason behind a rise in US bond yields last week.
The 10-year US Treasuries yield stood at 0.716 per cent, off a five-month low of 0.504 per cent touched in August.
In currencies, sterling dropped after the European Union told Britain yesterday that there would be no trade deal if it tried to tinker with the Brexit divorce treaty.
The warning came after British Prime Minister Boris Johnson’s government was reported to be planning new legislation to override parts of the Brexit Withdrawal Agreement it signed in January.
The pound lost 0.80 per cent yesterday to US$1.3167 (RM5.48), near its lowest levels in two weeks.
Other currencies barely moved with rises in US yields helping to stem the dollar’s recent weakness.
The euro eased slightly overnight to US$1.1818 while the dollar was little moved at ¥106.31 (RM4.17). Gold was little changed at US$1,930.9 per ounce.
Oil prices dropped to five-week lows after Saudi Arabia made its deepest monthly price cuts to supply for Asia in five months and as uncertainty over Chinese demand clouds the market’s recovery.
US WTI futures fell 1.4 per cent to US$39.23 per barrel. — Reuters
