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GLOBAL MARKETS-Shares struggle to shake off bearish mood as U.S. tech giants fall anew

Published 2020-09-10, 11:15 p/m
© Reuters.
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano

TOKYO, Sept 11 (Reuters) - Asian shares struggled to stem a bearish mood on Friday after U.S. big tech firm shares fell again overnight on growing doubts about U.S. stimulus and worries about their stretched valuations.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.2%, hovering just above a one-month trough touched earlier this week. Japan's Nikkei .N225 rose 0.3%.

Souring the mood, the U.S. Senate on Thursday killed a Republican bill that would have provided around $300 billion in new coronavirus aid, as Democrats seeking far more funding prevented it from advancing. need for more fiscal support seems obvious, but the chances of imminent support have diminished significantly," wrote Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.

Data also showed the number of Americans filing new claims for unemployment benefits remained high last week, and the total number of people who are on unemployment benefits increased to 29.6 million. and military tensions between Washington and Beijing appeared to intensify as Taiwan denounced China on Thursday over large-scale air and naval drills off its southwestern coast. tech shares, unquestionable leaders of the world's stock recovery since late March, failed to sustain a brief rebound.

On Wall Street on Thursday, the S&P 500 .SPX lost 1.77% while the Nasdaq Composite .IXIC dropped 1.99%, both on course for a second straight week of losses. .N

The NYSE Fang+ index of big 10 tech companies .NYFANG has lost 5.4% so far this week -- its biggest weekly loss since the market turmoil in March if sustained by the end of Friday.

Still, the index is more than double its March trough and investors have gathered that their high valuations are justifiable in light of near zero interest rates in much of the developed world and massive liquidity the world's central banks have created.

Many investors have said the selloff was a healthy correction. with the world's stocks still trading near the most expensive levels relative to profit outlook since the 2000 tech bubble, some analysts called for caution.

"Global shares had rallied on expectations of economic recovery from lockdowns. But as the autumn begins (in the northern hemisphere), people wonder if the coronavirus infections could worsen," said Kozo Koide, chief economist at Asset Management One.

"You never know if vaccine deployment is that easy nor if banks need to aside more provisions for struggling firms in hospitality sector. Considering all that, investors are likely to question the current valuations can be justified," he said.

In the currency market, the British pound wobbled near a 1 1/2-month low set on Thursday on fears that UK-EU trade negotiations may fall apart.

The European Union told Britain it should urgently scrap a plan to break their divorce treaty, but Prime Minister Boris Johnson's government refused and pressed ahead with a draft law that could sink four years of Brexit talks. pound traded at $1.2815 GBP=D4 , having slipped to $1.2773 overnight.

The euro changed hands at $1.1833 EUR= having briefly hit a one-week high on Thursday after European Central Bank President Christine Lagarde said that while the ECB is watching the exchange rate, it is not a monetary policy tool.

Traders took her comments to mean the ECB was unlikely to undertake measures to weaken the currency.

The yen was little moved at 106.18 per dollar JPY= .

Oil prices were under pressure from a surprise rise in U.S. stockpiles and weak demand due to the coronavirus pandemic.

Brent crude LCOc was down 0.2% at $39.98 a barrel after falling nearly 2% on Thursday. U.S. crude CLc1 was flat at $37.30, having fallen 2% in the previous session. (Editing by Kim Coghill)

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