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World markets shrug off tech-led selloff on Wall St

BANGKOK (AP) – Shares in Europe and Asia were mostly higher yesterday after a historic plunge in the stock price of Facebook’s parent company yanked other tech stocks lower on Wall Street.

Shares rose in Paris, London and Tokyo. Hong Kong jumped 3.3 per cent after re-opening from Lunar New Year holidays. Trading in Shanghai will resume on Monday.

But world markets were little affected. Trading has been relatively muted this week, with Chinese markets closed and coronavirus cases still surging in Asia, especially in Japan and Hong Kong,

“Unfortunately, coronavirus is dragging on like ground hog day and touching all of us,” Shane Oliver of AMP Capital said in a commentary.

In London, the FTSE 100 added 0.5 per cent to 7,568.99, while the CAC 40 in Paris climbed 0.3 per cent to 7,024.92. Germany’s DAX gave up early gains, falling 0.5 per cent to 15,290.44.

On Wall Street, the future for the S&P 500 jumped 0.8 per cent, while the contract for the Dow future was up 0.3 per cent.

Wall Street’s major indexes are still on track for weekly gains, helped by strong earnings reports from companies like Apple, Exxon, UPS and Google’s parent Alphabet.

On Thursday, the S&P 500 fell 2.4 per cent, its biggest drop in nearly a year, weighed down by the the 26.4 per cent wipeout in Meta Platforms, as Facebook’s owner is now known. It erased more than USD230 billion in market value, easily the biggest one-day loss in history for a United States (US) company. The stocks of other social media companies including Twitter and Snap also fell.

The Dow industrials lost 1.5 per cent and the tech-focussed Nasdaq composite gave up 3.7 per cent, its biggest loss since September 2020. The Russell 2000 index of small caps lost 1.9 per cent.

The retreat ended a four-day winning streak for the market.

In Asia yesterday, Hong Kong’s Hang Seng rose 771 points to 24,573.29. The Nikkei 225 in Tokyo added 0.7 per cent to 27,439.99. South Korea’s Kospi advanced 1.6 per cent to 2,750.26. In Sydney, the S&P/ASX 200 reversed early losses to gain 0.6 per cent, closing at 7,120.20.

India’s benchmark Sensex lost 0.2 per cent.

Big technology and communications companies played a big role in driving gains for the broader market throughout the pandemic and much of the recovery in 2021. But investors have been shifting money in expectation of rising interest rates, which make shares in high-flying tech companies and other expensive growth stocks relatively less attractive.

The Federal Reserve is planning its first interest rate hike in March, aiming to tamp down inflation that has surged to 40-year highs. Those higher costs will likely persist until supply chains loosen and help ease costs for businesses and perhaps lower prices for consumers.

In other trading, US benchmark crude oil picked up USD1 to USD91.27 per gallon after surging USD2.01 to USD90.27 per gallon on Thursday.

Brent crude, the basis for pricing international oils, gained 94 cents to USD92.05 per gallon.

The US dollar rose to 115.08 Japanese yen from 114.96 yen late Thursday. The euro was at USD1.1462, up from USD1.1437.

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