Today's Edition
HONG KONG (AFP)
Equities, oil, and precious metals plunged Monday to extend the volatility that struck markets at the end of last week, with concerns about elevated tech valuations once again casting a shadow.
Investors resumed Friday's rollercoaster ride on trading floors, as they assessed geopolitical developments, the latest batch of earnings from market heavyweights, and the prospect for US interest rate cuts.
After a strong start to the year fuelled by fresh hopes for artificial intelligence, stocks went into reverse last week as traders again questioned the wisdom of the vast sums of cash pumped into the sector and worries about when they will see returns. That has also raised fears of a tech bubble that could soon pop after a surge to record highs last year.
The latest round of selling came after Microsoft announced a surge in spending on AI infrastructure, which revived concerns that companies could take some time before seeing a return on their investments.
Seoul, which has hit multiple records this year thanks to its big tech weighting, plunged more than five percent, with chip giant SK hynix shedding eight percent and market heavyweight Samsung off more than five percent.
Tokyo, also home to several big-name tech firms, shed more than one percent. Hong Kong, Shanghai, Sydney, Singapore, Wellington, Manila and Bangkok also tumbled.
Jakarta tanked more than five percent, extending last week's rout after index compiler MSCI called on regulators to look into ownership concerns and a warning it would hold off adding Indonesian stocks to its indexes or increasing their weighting. There are concerns it could announce a downgrade from emerging market to frontier market, which could spark an outflow of foreign capital.
Oil prices also tanked. Both main crude contracts shed more than four percent.
Oil's drop was helped by a stronger dollar, which came on the back of news that US President Donald Trump had tapped Kevin Warsh to take the helm at the US central bank. The president said Warsh, a former Morgan Stanley investment banker and Fed governor, "will go down as one of the GREAT Fed Chairmen, maybe the best".
Traders regard Warsh as the toughest inflation fighter among the final candidates, raising expectations of monetary policy that would underpin the greenback. The choice also eased recent concerns about the Fed's independence following a series of attacks on incumbent Jerome Powell over his reticence to cut rates as quickly as the president wanted.
The dollar surged, having plunged most of last week on concerns the White House was happy to see it weaken.
The announcement sent dollar-priced precious metals plunging Friday, with gold losing as much as 12 percent and silver more than 30 percent at one point.
And the losses mounted on Monday, with gold shedding as much as six percent to touch $4,586, while silver briefly lost around 11 percent to $75. Both bounced back slightly but were well down from their record highs of $5,595 and $121 touched last week.
