Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

FANGS and BATS sell-off spooks world stocks

Economy May 11, 2021 05:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: First trading day of stock market in Tokyo

By Marc Jones

LONDON (Reuters) - Global stock markets were set for a second day of sharp losses on Tuesday as the combination of inflation worries and an anti-monopoly drive in China sent the world's mightiest tech giants tumbling.

Europe had touched a record high on Monday but its restart was a sea of red as London's FTSE, Frankfurt's DAX and the CAC 40 in Paris all dropped roughly 2%. (EU)

Asia's main regional equity gauges had suffered their biggest slide in nearly two months overnight, with Japan's Nikkei and Hong Kong's Hang Seng both closing down 3%.

With talk of tighter regulation from Beijing, Chinese tech heavyweights Baidu (NASDAQ:BIDU), Alibaba (NYSE:BABA) Tencent, collectively dubbed the BATs, all dropped more than 3%. Food delivery major Meituan tumbled as much as 9.8% too, leaving its value $30 billion lower in a week.

It had followed a 3.6% slump in the U.S. FANG+ index of megacap tech firms on Monday. Electric car pioneer Tesla had skidded 6.4% and Google (NASDAQ:GOOGL) fell 2.5%. (N)

"The underlying driver is that there is still a rotation out of duration (higher interest rate) sensitive parts of the market and this is why tech stocks are coming under pressure now," said Mizuho's Head of multi-asset strategy Peter Chatwell.

"Given the rise in the earnings power of these firms different governments will also seek to raise more tax revenue from them in the coming years."

INFLATION ANGST

The cost of raw materials from copper to wood to wheat have been soaring over the last month, testing the views of top central bankers that rises in inflation will be transitory as economies emerge from COVID lockdowns.

U.S. breakeven rates, which factor in inflation, have scaled multi-year peaks. Most euro zone bond yields edged back up on Tuesday while a market gauge of long-term inflation expectations was nearing its highest in over two years.

A host of Federal Reserve and European Central bank speakers this week will be closely watched by markets to assess how authorities are likely to respond.

A test case on U.S. inflation will come when the Labor Department releases consumer price index report on Wednesday.

"Inflation's shadow looms large and we do think that there is a limit to the Fed's tolerance of inflation," DBS Bank said in a note.

In currency markets speculation that growing price pressure would erode the dollar's value kept the U.S. currency near a 2-1/2-month low.

A consolidation in commodity markets after their surge on Monday kept the Australian dollar just below a two-month high at $0.7827. The Canadian dollar stabilised near a four-year high, while the New Zealand dollar perched comfortably at February highs.

Oil prices gave up earlier gains as concerns that rising COVID-19 cases in Asia will dampen demand outweighed expectations that a major U.S. fuel pipeline could restart swiftly.

U.S. crude dipped 0.66% to $64.49 a barrel. Brent crude fell to $67.84 per barrel.

Metal markets saw copper prices start to nudge higher again. They were last at $10,470 a tonne having hit a record high $10,747.50 the previous session. Iron ore had settled too after surging 7% on Monday.

FANGS and BATS sell-off spooks world stocks
 

Related Articles

Wall St set to extend bounce as inflation fears ease
Wall St set to extend bounce as inflation fears ease By Reuters - Jun 27, 2022

By Shreyashi Sanyal (Reuters) - Wall Street's main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email