Market Update & Important Indicators:
Shares of some large technology firms came under further pressure Wednesday amid fears of increased regulatory oversight, while major stock indexes swung between gains and losses in another volatile session. The tech-heavy Nasdaq Composite dropped 0.9%, underperforming the Dow industrials and the S&P 500, which were only down 0.04% and 0.3%, respectively. All three indexes had fallen in four of the past five sessions entering Wednesday. After powering the broader market for the past year, technology and internet stocks have fallen recently, dragging the broader market down with them. The S&P 500's information technology sector, which has fallen about 5% over the past week, was down 0.6% Wednesday. The consumer discretionary sector, which houses tech-focused giants such as Amazon.com and Netflix, dropped 1.1%. Backlash over how social-media firms manage user data and doubts that Facebook and Alphabet can extend their dominance in digital advertising have hurt sentiment in recent sessions. Those challenges have cropped up at a time when the prospect of higher interest rates and trade disruptions had already made investors nervous about the tech sector, which is still up 24% over the past year. The U.S. gold price traded 1.5% lower overnight, falling to 1,324.40 US$/oz.
European shares closed higher, with the Stoxx Europe 600 index up 0.5% at 369.26, buoyed by falls in the euro against a firmer dollar after fourth quarter U.S. GDP was revised up more than forecast. Falls in tech stocks weighed on Germany's DAX index, however, which ended down 0.3%, while France's CAC 40 rose 0.3% and the FTSE 100 by 0.6%. Analysts said although sentiment has improved, investors remain nervous about the potential for trade tensions. U.K. pharmaceutical company Shire was the top riser, up 14% after Japan's Takeda Pharmaceutical said it was considering a takeover bid. But tech stocks slid on fears about potential global contagion from the tech selloff in the U.S.
Technology stocks led major indexes in Asia lower Wednesday. Japan's Nikkei Stock Average finished down 1.3%, erasing much of Tuesday's 2.7% gain, while the tech-heavy South Korean benchmark was down 1.3%. Hong Kong's Hang Seng fell by 2.5%.
Australia's stock benchmark reversed Tuesday's rebound, putting it at a fresh 5 1/2-month closing low as a downbeat 1Q nears its conclusion. While holding up better than most benchmarks in the region after fresh struggles for US equities overnight, the S&P/ASX 200 fell 0.7% to 5789.5. Financials hit another 16-month low and materials and consumer discretionary each slid 1.2%. But yield plays rose, with utilities and REITs both rising as global bond yields have fallen within the past day.
The London Metal Exchange’s 3-month copper contract rose overnight, jumping 0.24% at 6,665/t. Most of the other base metals also increased overnight. Zinc prices continued their gains, rising 0.4% to 3,301/t, whilst tin prices jumped 0.1% to 20,965/t. Lead prices rose 0.8% to 2,429/t, whilst nickel was the biggest base metal gainer overnight, jumping 1.0% to finish at 13,081/t. Aluminium prices were again the only base metal to decline, shedding 0.5% at 2,008/t.
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