Asian stock markets fell sharply on Tuesday, November 20, 2018, after a heavy technology-led sell-off on Wall Street rattled investors and pushed the dollar lower on the back of weak U.S. data.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.9 percent. The Shanghai Composite Index fell 1 percent, Australian shares slipped 0.9 percent and South Korea’s tech-heavy market dropped 0.8 percent.
In Seoul, Samsung Electronics declined 1.8 percent and SK Hynix Inc fell 2.8 percent. In Japan, Tokyo Electron lost 1.4 percent, Advantest shed 1.2 percent and Sony Corp dropped 2.6 percent.
The Nikkei eased 0.9 percent, with Nissan Motor Co among the biggest losers after chairman Carlos Ghosn was arrested on Monday over alleged financial misconduct. Nissan said he would be removed from the board this week.
“By under-reporting his corporate salary, he basically deprived Nissan’s shareholders of opportunities to judge if the amount of his salary was appropriate,” said Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan. “This incident will make investors review if Japanese corporate governance is working.”
U.S. markets had already taken a beating on Monday, when the Nasdaq fell 3 percent as investors sold Apple, internet stocks and other technology names. Uneven signals from the United States and China over their trade dispute added to the caution.
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo, said: “The drop by U.S. stocks will cut short any attempt by equity markets to mount a sustained bounce. Investor sentiment has been subdued by lingering weakness in U.S. technology shares.”
Broader worries about earnings growth, higher borrowing costs, slowing global momentum and trade tensions have already wiped trillions of dollars from equities over the previous two months, with October standing out as a particularly brutal month for markets.
In currencies, the dollar hovered near a two-week low against a basket of currencies after U.S. home builder sentiment posted its steepest monthly drop in more than 4-1/2 years in November. The greenback also remained under pressure after Fed Vice Chair Richard Clarida and Dallas Fed President Robert Kaplan voiced concern late last week about a possible global slowdown.
The U.S. currency has risen strongly in 2018, helped by three Fed rate hikes and a resilient economy, although some traders believe the rally may be nearing its end. Long-term U.S. Treasury yields slipped to a seven-week low of 3.052 percent, while the dollar index hovered near 96.120, an 11-day low reached on Monday.
The euro was little changed at $1.1448 after rising 0.35 percent overnight. The dollar touched a three-week low of 112.40 yen and last traded at 112.58. The Australian dollar held at $0.7294 after losing 0.5 percent the previous day.
Oil prices also paused after the previous day’s gains tied to a reported drawdown in U.S. inventories, possible European Union sanctions on Iran and talk of OPEC production cuts. U.S. crude futures were flat at $57.20 a barrel, while Brent slipped 0.1 percent to $66.72 a barrel.
Additional reporting by Ayai Tomisawa in Tokyo; Editing by Shri Navaratnam.
