Asian markets fall sharply after USA losses

Dow Jones industrials sink 700 points as bond yields rise

Dow Jones industrials sink 700 points as bond yields rise

Asian share markets sank in a sea of red on Thursday after Wall Street suffered its worst drubbing in eight months, a conflagration of wealth that could threaten business confidence and investment across the globe.

Australia's benchmark ASX 200 dropped nearly 2 percent immediately after opening in Asia Thursday morning.

Japan's benchmark fell by an unusually wide margin of 3.9 percent and China's main index lost 5.6 percent.

Markets in Hong Kong, South Korea, Australia and Southeast Asia recorded similar declines.

It also raised the stakes for USA inflation figures due later on Thursday as a high outcome would only stoke speculation of more aggressive rate hikes from the Federal Reserve.

Higher interest rates makes borrowing more expensive, slowing economic activity and hurting investor appetite for risk.

President Trump on Wednesday strongly criticized the Fed for tightening rates, again signaling that he wanted interest rates to remain low.

"I think the Fed has gone insane", he charged.

Stephen Innes of OANDA said that Trump's comments have put pressure on the dollar but "the severity of this equity rout could bring the hawkish Fed narrative into question".

Sentiment also has been dampened by the spreading US-Chinese tariff fight over Beijing's technology policy.

The Chinese economy was already showing signs of weakening, and United States tariffs on billions of dollars worth of goods could threaten the country's massive export industries. -China tensions, the Justice Department announced Wednesday it arrested an official of China's Ministry of State Security on charges of trying to steal trade secrets from US aerospace companies.

A US-led trade war against China has also made investors anxious about the outlook for global growth.

Tokyo's Nikkei 225 gave up 3.9 percent to 22,590.86 and the Shanghai Composite index lost 5.2 percent to 2,583.46. The Kospi in South Korea fell 4.4 percent to 2,129.67. Australia's S&P/ASX 200 slipped 2.4% to 5,906.00.

Every S&P 500 sector fell heavily, with big-name technology stocks like Facebook and Apple among the biggest drags on the U.S. market.

"Equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the International Monetary Fund about financial stability risks and continued trade tension all driving uncertainty", summed up analysts at ANZ.

The Dow Jones industrial average shed 831,83 points to close down by 3.2 per cent at 25,598.74 in its largest fall since February.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 2.7 percent to its lowest in 18 months.

Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in 2½ years. The S&P technology sector dropped 4.8 per cent, with Apple Inc down 4.6 per cent.

"China buying yuan and selling dollars would likely entail some selling of US Treasuries at a point where the market is showing some vulnerability, and could be very vulnerable to signs of China liquidation", added Mr Ruskin.

"The valuation of U.S. stocks, especially tech stocks, is still pretty high and there could be some profit taking actions now", Mr Tan explained.

The dollar slipped to 112.17 Japanese yen from 112.27 yen late Wednesday.

The euro pushed up to $1.1535 and away from a low of $1.1429 early in the week.

U.S. crude was off 52 cents at US$72.65 in Asia, while Brent crude had yet to trade after falling 2.3 per cent overnight to end at US$83.09 a barrel.

"Earnings are really important because that was part of the concern that sparked the sell-off", Darrell Cronk, president and chief investment officer at Wells Fargo Investment Institute, told Bloomberg TV in NY. Brent crude, the global standard, dropped 1.58 dollarsssss to 81.51 dollars a barrel.

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