The Chinese CSI 300 index of stocks listed in Shanghai and Shenzhen fell 1.6%, while the Japanese benchmark Topix fell 1% and the Australian S & P / ASX 200 fell 3%. Hong Kong’s Hang Seng also fell 1.8 percent.
The falls in Asia followed a frenzied day on Wall Street, where the tech-focused Nasdaq Composite Index fell 5% while the S&P 500 fell 3.5%.
The turnaround hit major tech stocks, including Apple, whose shares fell 8%, wiping out more than $ 150 billion from the company’s market capitalization. Amazon, Alphabet and Microsoft all ended the day down more than 4%.
Investors and analysts have expressed growing concern that monetary and fiscal stimulus have pushed stocks to unsustainable levels. Valuations appear strained, with the global pandemic still spreading and no vaccines in sight, while the US presidential election in November heightens volatility.
“Market corrections are to be expected – a market fueled by central bank largesse, economic surprises and record profits [performance] over the past few months it was never going to keep up its hectic pace forever, ”said Kerry Craig, Global Market Strategist at JPMorgan Asset Management.
On Friday, the sell-off in U.S. tech stocks spread to Chinese tech champions, with e-commerce group Alibaba falling 6.7% and rival Tencent by 3.9%.
Louis Tse, managing director of VC Brokerage in Hong Kong, said Chinese tech stocks had entered a “slump” after a recent rally, reporting losses of 2.7% for the China-focused Hang Seng Tech index .
“We are seeing strong profit taking ahead of the weekend,” he said.
As the S&P 500 remains 7% higher for the year to date and the Nasdaq Composite is up 28%, futures markets pushed US stocks lower on Friday. The former is expected to fall by 0.4% and the latter by 1% when trading begins on Wall Street. The FTSE 100 is expected to lose 0.4%.
“It doesn’t look like anything other than taking a profit. I’m giving you pretty huge profits, ”said Robert Carnell, Asia-Pacific research manager at ING. “It wasn’t a rotation of stocks into bonds. . . this is not a risky return. ”
The stock selloff also caused chills in commodity markets, with oil benchmarks falling in Asian trading.
Brent, the international benchmark, fell 0.8% to $ 43.71 per barrel. Gold, which is often used as a safe haven in times of uncertainty, rose 0.3% to $ 1,936.48 per troy ounce.