BANGKOK — Shares dropped Tuesday in Asia after selling of several Big Tech companies pulled U.S. benchmarks lower.
Despite reassurances from the Federal Reserve and a much weaker than expected U.S. jobs reading last week, investors have refocused on the potential for surging prices to pressure central banks into tapering off on their massive stimulus and ultra-low interest rates, analysts said.
“Investors seem to look past the jobs report and continue to place their focus on the inflation narrative with rising commodities prices and chip shortages in play,” Jun Rong Yeap of IG said in a commentary.
Markets are watching for U.S. and Chinese consumer and producer prices due out this week, he said.
On top of that, a number of Asian countries are seeing rising coronavirus infections and deaths that are straining health systems and setting back progress toward vanquishing the pandemic.
Tokyo’s Nikkei 225 JP:NIK slipped 2.8% while the Hang Seng HK:HSI in Hong Kong lost 2.1%. The Shanghai Composite index CN:SHCOMP shed 0.3%. In Seoul, the Kospi KR:180721 dropped 1.3%.
Australia’s S&P/ASX 200 AU:XJO lost 1.2% to 7,094.30. The government is due Tuesday to release a big-spending economic plan for the next fiscal year designed to create jobs and repair pandemic damage and with an eye toward winning votes at looming general elections.
Shares fell in Singapore SG:STI, Taiwan TW:Y9999 and Indonesia ID:JAKIDX.
On Monday, the S&P 500 SPX fell 1% to 4,188.43. The Dow Jones Industrial Average DJIA dropped 0.1% to 34,742.82. The blue chip index, which hit an all-time high on Friday for the third straight day, traded higher for much of Monday, but dipped into the red in the last half-hour of trading.
Small company and technology stocks had a rough day. The Nasdaq COMP lost 2.5% to 13,401.86, while the Russell 2000 index fell 2.6% to 2,212.70.
Big Tech companies, including Apple AAPL, Facebook FB, Amazon AMZN and Google’s parent company, Alphabet GOOGL, accounted for most of the S&P 500’s decline. Communication stocks and companies that rely on consumer spending also helped pull the market lower, outweighing gains in household goods makers, utilities and other sectors.
The wave of selling handed the Nasdaq its worst day in more than seven weeks, as the index is heavily weighted with big technology stocks. The tech sector, which led the market’s stunning comeback in 2020, now lags the other 10 sectors in the S&P 500 so far this year with a gain of 3.9%.
Inflation has been a concern for investors since bond yields spiked earlier this year, but yields have mostly stabilized since then. The yield on the 10-year Treasury eased to 1.59% from 1.61% late Monday.
In other trading, U.S. benchmark crude oil CLM21 lost 52 cents to $64.40 per barrel in electronic trading on the New York Mercantile Exchange. It gained 2 cents to $64.92 per barrel on Monday. Brent crude BRNN21, the international standard for pricing, gave up 57 cents to $67.75 per barrel.
The U.S. dollar USDJPY rose to 108.88 Japanese yen from 108.83 yen late Monday.