New Age | Global stocks, bitcoin retreat
Stock markets slid and bitcoin dropped under $90,000 Tuesday as investors worried about lofty tech valuations on the eve of earnings from AI chip titan Nvidia.
The top cryptocurrency briefly fell below the key level for the first time in seven months, also as traders increasingly saw the US Federal Reserve deciding against an interest-rate cut next month.
Having struggled in the first half of this year, bitcoin soared to a record high of $126,251 last month.
London, Paris and Frankfurt stock markets each dropped more than one per cent around the half-way stage Tuesday, and after a sharp sell-off in Asia.
‘The tech-focused selloff seen in the US has evidently resulted in global contagion,’ said Joshua Mahony, chief market analyst at Scope Markets.
After this year’s record rally for global equities, traders have begun to question whether the billions poured into artificial intelligence will lead to big returns.
All eyes will be on Nvidia’s quarterly earnings due Wednesday for clues about the AI sector’s outlook.
Reports from retailers Home Depot, Target and Walmart will also give an insight into consumer sentiment.
‘The risk-off tone was reinforced by the latest signals from the Fed, as investors continued to price out the likelihood of a December rate cut,’ said Jim Reid, managing director at Deutsche Bank.
Investors will look to the US September jobs report Thursday — delayed due to the government shutdown — for fresh signs on rates and the health of the world’s largest economy.
After a day deep in the red on Wall Street, Tokyo and Seoul led losses in Asia.
Tokyo tumbled more than three per cent, with investors nervously eyed Japanese bond markets as Prime Minister Sanae Takaichi prepared to unveil an economic stimulus package.
Yields on the 20-year government bond hit their highest since 1999 amid speculation the spending bill will ramp up borrowing.
Takaichi is due to meet BoJ head Kazuo Ueda to discuss bank policy, with its plans to raise rates likely to be on the agenda.
The yen slipped to around 155.38 per dollar, its weakest since January, amid fading expectations for more interest rate hikes.
Selling was compounded by tensions between Japan and China over Takaichi comments on Taiwan, prompting both governments to warn citizens about travel.
Seoul tanked more than three per cent, having enjoyed a spectacular rally of more than 60 per cent so far this year led by chip titans Samsung and SK hynix, which were both hammered on Tuesday.
Taipei shed more than two per cent as market heavyweight chip firm TSMC suffered selling pressure.
Hong Kong lost nearly two per cent, while Shanghai also closed lower.
