Asian markets fell deep into negative territory Friday following painfully deep losses on Wall Street, where the tech sector finally succumbed to profit-taking after months of mind-boggling gains.

All three main indexes in New York suffered hefty selling but the tech-heavy Nasdaq led the way with global titans such as Apple, Microsoft, Amazon and Facebook among the worst hit.

And the red ink flooded into Asia Friday, with tech firms again the whipping boys.

Tokyo, Hong Kong, Seoul, Singapore, Mumbai, Jakarta and Wellington all sank more than one percent, while Sydney dropped more than three percent. Shanghai and Taipei were both off 0.9 percent off. London, Paris and Frankfurt were also down at the open.

The drop had been expected after the Nasdaq climbed around 80 percent from its March trough, with analysts warning that valuations were growing increasingly out of sync with economic realities -- Tesla has risen nearly 500 percent in the time and Apple more than 120 percent.

The rally had been propelled by expectations for strong earnings growth next year following fiscal and monetary stimulus measures and as the world economy recovers from the virus crisis.

"Given the market's seemingly relentless climb higher on the back of the mega-cap tech names, it should be no surprise that a pullback was in the offing as the market became increasingly extended and overbought," Quincy Krosby, at Prudential Financial Inc, said.

This could be "an overbought market that is burning off froth, following end-of-the-month portfolio adjustments as managers needed to catch up".

Observers said September has historically been a bad month for stocks and that while recent economic data had not been brilliant, it was not bad enough to spark such a sell-off.

- 'Corrections to be expected' -

And with central banks promising to back up financial markets for the foreseeable future, there are no expectations of a calamitous drop such as that seen in March or the tech bubble crisis two decades ago.

"Corrections are to be expected -- a market fuelled by central bank largesse, economic surprises and record earnings beats in the last few months was never going to maintain its heady pace forever," said JP Morgan Asset Management strategist Kerry Craig.

"When it comes to the tech sector and the other online giants that have gained so much in the last few months, there could be profit-taking as we head towards the US presidential election in November.

"Negative headlines on potential regulatory and tax changes are likely to add to investor unease in a market with elevated valuations."

Rodrigo Catril, at National Australia Bank, added: "Now the question is whether the correction has legs or whether investors are tempted back in."

Investor focus is now on the release later Friday of government jobs data, which will provide the latest snapshot of the world's number one economy.

Economists expect to see a surge in employment and a drop in the jobless rate to below 10 percent. The closely watched jobless claims report Thursday showed a bigger-than-forecast fall below one million.

"A strong jobs report would add weight to the argument the recovery continues," said CMC Markets analyst David Madden.

"The latest manufacturing and services updates have been positive, broadly speaking. On the other side of the coin, a disappointing update could put pressure on the Republicans to reach a compromise with the Democrats with regards the stimulus package."

- Key figures around 0720 GMT -

Tokyo - Nikkei 225: DOWN 1.1 percent at 23,205.43 (close)

Hong Kong - Hang Seng: DOWN 1.4 percent at 24,655.45

Shanghai - Composite: DOWN 0.9 percent at 3,355.37 (close)

London - FTSE 100: DOWN 0.6 percent at 5,805.41

Euro/dollar: DOWN at $1.1839 from $1.1854 at 2050 GMT

Dollar/yen: DOWN at 106.16 yen from 106.17 yen

Pound/dollar: DOWN at $1.3271 from $1.3280

Euro/pound: DOWN at 89.21 pence from 89.26 pence

West Texas Intermediate: DOWN 0.8 percent at $41.06 per barrel

Brent North Sea crude: DOWN 0.7 percent at $43.78 per barrel

New York - Dow: DOWN 2.8 percent at 28,292.73 (close)

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

France puts jobs at heart of economy rescue plan
Paris (AFP) Sept 3, 2020
The French government said Thursday employment was paramount as it unleashed a mammoth spending plan for the virus-hit economy that has been hemorrhaging jobs. Prime Minister Jean Castex promised 160,000 new jobs in 2021 as part of a recovery plan worth 100 billion euros ($120 billion), designed to help growth and employment at a time when daily virus numbers in France are on the rise again. "The ambition and size of this plan are historic," he told reporters after a cabinet meeting backing the ... read more