Wall Street Drop Weighed on the Global Stock Market

Highlights:

• • USA
    The Dow Jones slipped by 1.63% or 569.38 points, to 34,299.99. Meanwhile, S&P 500 fell 2.04%, or 90.48 points, to 4,352.63. The Nasdaq lost 2.83% or 423.29 points, standing at 14,546.68.
  • ASIA
    The Nikkei declined by 2.12% or 639.67 points, to 29,544.29.
    The Kospi closed with a loss of 1.22% or 37.65 points to 3,060.27.
    The Hang Seng Index closed with a rise of 0.67% or 163.11 points, to 24,663.50. 
  • EUROPE
    The EuroStoxx 50 index was trading with a rise of 1.15%, the FTSEurofirst 300 advanced by 1.08%, and the Stoxx 600 gained 0.98%.

Wall Street closes with severe losses

The New York Stock Exchange closed with a severe pullback on Tuesday. Wall Street is on its way to its worst month in a year, weighed down by rising bond interest rates. 

The Dow Jones slipped by 1.63% or 569.38 points, to 34,299.99. Meanwhile, S&P 500 fell 2.04%, or 90.48 points, to 4,352.63. The Nasdaq lost 2.83% or 423.29 points, standing at 14,546.68.

Allianz Investment Management stated that the liquidation caused by the interest rates is a reminder of the impact of the Fed’s monetary stimulus. Meanwhile, the Central Bank has signaled a rapid reduction in its support measures. 

The Fed has been buying treasury bills and other securities worth $120 billion a month since the start of the pandemic crisis. At its monetary meeting last week, the central bank hinted that it would start tapering soon.

The New York stock market started the session with doubts. It decided firmly on sales after Powell admitted to the Senate Banking Committee that inflation in the US is more worrying and structural than at the beginning of this year. The central bank’s president also mentioned that supply chain problems were one of the main reasons for high inflation. 

Meanwhile, in the public debt market, the yield on the 10-year Treasury bond pushed to levels not seen since June. 

Tech stocks led the decline

When looking over each sector, the technology companies’ drop became highlighted. The sector lost 2.99%. Meanwhile, the communications sector also slipped by 2.79%. 

Facebook fell by 3.66% to $340.65, Amazon dipped by 2.64% to $3,315.96, and Alphabet yielded 3.76% to $2,723.68.

The only sector that remained in the green territory was energy, advancing by 0.44%. Meanwhile, a crisis looms due to the tight global oil supply and increased demand for fuels. 

Microsoft was the most affected among the 30 companies listed on the Dow Jones, plunging by 3.62%. Salesforce followed it with a loss of 2.69%. Goldman Sachs lost 2.60%. The only gainers were Chevron, adding 0.41%, and Caterpillar advanced by 0.33%. 

The Nikkei fell sharply

The Nikkei followed the US stock market decline the day before.

In response to this, Japanese stocks have been almost entirely cheap since the morning. Concerns over rising interest rates have risen sharply, leading to profit-taking sales. 

The Nikkei declined by 2.12% or 639.67 points, to 29,544.29. Topix lost 2.09% or 43.48 points and stood at 2,038.29

The result of the final vote in the LDP presidential election was confirmed after the closing. According to the data, the winner is former political chairman Fumio Kishida. Kishida has affirmed that he will break with “neoliberal policies” and promote a more equitable distribution of wealth by supporting the most disadvantaged. He has warned that he will monitor more of the country’s large corporations.

High-tech stocks have fallen in response to rising long-term interest rates in the US market. Investor anxiety seems to be increasing.

Among the shares with the highest capitalization, the technology giant Softbank tumbled by 1.69%.

The fall of sensor manufacturer Keyence also was noteworthy, losing 4.13%. Tokyo Electron, a producer of components for semiconductors, slumped by 5.33%. Meanwhile, Lasertec fell by 0.85%.

 

Kospi closed with losses for two days in a row

The Seoul stock market also followed the sharp decline of Wall Street. The Kospi closed with a loss of 1.22% or 37.65 points to 3,060.27. 

Seoul remained negative all day. Foreigners net sold 661.4 billion won, and institutions net sold 312.4 billion won. Meanwhile, individuals net bought 961.2 billion won.

Samsung Electronics, the main asset on the Kospi, plunged by 2.88%. Meanwhile, SK Hynix dipped by 3.38%. 

Naver, the company that controls the leading search engine in South Korea, shed 1.4%. Besides, Kakao, the operator of the most popular messaging application in the Asian country, dropped by 0.85%.

In the pharmaceutical sector, Samsung Biologics was one of the few exceptions, posting increases. The company gained 0.34%, although its rival Celltrion fell by 0.95%.

Hyundai Motor, the most prominent car manufacturer in South Korea, closed flat.

By industry, medical precision, electronics, textiles and apparel, and transportation fell. Meanwhile, non-metallic minerals advanced by 2.83%. Other sectors registering slight gains were telecommunication, transportation equipment, electricity, and gas industry.

The stock market’s trading volume was 812.08 million shares, and the transaction value was 14.94 trillion won.

 

Hang Seng moving up, Evergrande shares soar

The Hang Seng Index closed with a rise of 0.67% or 163.11 points, to 24,663.50. 

Meanwhile, the Hang Seng Technology Index fell 0.84%.

Sub-indices closed mixed. Finance, real estate, and services sectors settled with increases. Meanwhile, commerce and industry fell by 0.32%.

The shares of Evergrande, which is experiencing severe economic difficulties, grew by 14.98%.

The textile Shenzhou and the real estate companies New World Development and Sun Hung Kai led the biggest increases of the day.

Oil companies Petrochina and Cnooc were the worst performers, plunging by 6.6% and 2.67%, respectively. Sinopec limited its fall to 1.52%.

Paper stocks fell collectively. Lee & Man Paper fell more than 9%, Nine Dragons Paper fell more than 6%, and Chenming Paper declined more than 4%.

Tech companies closed lower. Alibaba dipped by 1.72%, Tencent lost 1.02%, and Meituan yielded 0.71%.

China Merchants Bank and the insurer AIA advanced significantly, adding 3.57% and 3.06%, respectively.

The business volume of the session amounted to 123,530 million Hong Kong dollars. 

 

European shares erased some losses

European stock markets increased in the mid-session on Wednesday, erasing some of their massive losses. 

The EuroStoxx 50 index was trading with a rise of 1.15%, the FTSEurofirst 300 advanced by 1.08%, and the Stoxx 600 gained 0.98%. Technology stocks led the rebound on Wednesday. The sector’s Stoxx index gained 1.57%. Oil and gas fell by 0.44% in the wake of the decline in crude prices after their recent rally. 

Yesterday, the Stoxx 600 had the worst performance in almost two and a half months, sliding by 2.18%. 

Investors will monitor news from China on power shortages and the financial situation of real estate giant Evergrande.

In the United States, the suspense of a new shutdown remains in the absence of a financing law.