HONG KONG (AFP) – Technology and energy firms were the biggest losers as Hong Kong and Tokyo led an Asian market plunge yesterday, extending retreats across Europe and New York.
A global equity rally has hit the buffers this week as the US probe into Russia’s alleged election meddling sows uncertainty, Britain struggles to reach a Brexit deal with the European Union and traders remain cautious about Washington’s ability to push through tax cuts.
A key drag for Asia yesterday was copper prices which sank more than four per cent in London, having already lost about 10 per cent over the previous week. Analysts blamed a pick-up in the dollar on hopes for US tax cuts.
There are also worries about China’s crackdown on borrowing-fuelled investing.
“The sentiment in China has turned less positive after the conclusion of the national party congress, as the deleveraging rhetoric has returned to the market, especially with regards to real estate speculation,” TD Securities commodity strategist Ryan McKay told Bloomberg News.
“Worries of the deleveraging’s impact on real estate and construction demand saw optimism for commodity demand reduced and prices retreat.”
Oil prices were hit by data showing a big rise in US inventories.
Sydney-listed miner Rio Tinto shed 2.5 per cent and BHP was two per cent off, while energy giant Woodside Petroleum lost 0.3 per cent. CNOOC, Sinopec and PetroChina dived in Hong Kong while Inpex was hammered more than three per cent in Tokyo.
The losses hit wider markets. Tokyo ended two per cent down.
“The adjustment mode is deepening lately in the Japanese stock market,” said Shunichi Otsuka, general manager in the research department at Ichiyoshi Securities in Tokyo. “It’s difficult to buy unless US equities show firmness, even as some high-tech shares are becoming cheap.”