Tech stocks lead Wall Street's fall from record levels, ASX to open lower
Updated
Amid a downbeat session in global markets, Australian shares are expected to start the day lower.
Market snapshot at 8:20am (AEDT):
- ASX SPI 200 futures -0.4pc at 5,983, ASX 200 (Monday's close) +0.4pc at 6,075
- AUD: 80.95 US cents, 57.51 British pence, 65.34 Euro cents, 88.22 Japanese yen, $NZ1.10
- US: Dow Jones -0.7pc at 26,439, S&P 500 -0.7pc at 2,854, Nasdaq -0.5pc at 7,467
- Europe: FTSE +0.1pc at 7,672, DAX -0.1pc at 13,324, Euro Stoxx 50 -0.1pc at 3,643
- Commodities: Brent crude -1.6pc at $US69.42/barrel, spot gold -0.6pc at $US1,341.50/ounce, iron ore -0.1pc at $US74.33/tonne
Hong Kong and Shanghai were the weakest performing stock markets in Asia, down by 0.6 and 1 per cent respectively.
In European markets overnight, London's FTSE posted marginal gains (+0.1pc), while the Frankfurt and Paris indexes fell by 0.1 per cent each.
The Australian dollar weakened slightly (-0.2pc) to 80.95 US cents.
However, the local currency has risen against the British pound (+0.5pc), euro (+0.2pc) and New Zealand dollar (+0.3pc), but is steady against the Japanese yen.
In economics news, NAB will release its December reports on business conditions and confidence this morning.
Wall Street closes sharply lower
The main US indexes have pulled back sharply from their recent run of fresh records.
The tech-heavy Nasdaq has fallen by 0.5 per cent, while the Dow Jones and S&P 500 have slipped by 0.7 per cent each.
Apple shares fell by 2.1 per cent after the Nikkei reported the company would halve its iPhone X production target for the first quarter of 2018 — adding to growing concerns about weak sales of its new flagship phone.
Nervous investors sold their Apple shares ahead of the company's quarterly results announcement at the end of this week.
On the flipside, Dr Pepper shares shot up 22.4 per cent, after coffee company Keurig Green Mountain announced it would buy the soft drink maker for more than $US21 billion.
The technology sector fell 0.8 per cent, and weighed the most on the broader market.
Facebook shares also fell sharply (-2.1pc), while Microsoft and Google posted slight drops — down by 0.2 and 0.1 per cent respectively.
But the biggest decliners were defensive sectors like utilities (-1.2pc) and telecommunications (-1.2pc).
These sectors fell as US 10-year treasury yields hit their highest levels (above 2.7 per cent) since April 2014.
"Ahead of the FOMC [Federal Open Markets Committee] meeting this week the move higher in yields also suggest investors are seemingly more sensitive to potential policy changes," said NAB's senior foreign exchange strategist Rodrigo Catril.
The general consensus is that the Federal Reserve will not raise US interest rates this week — but will set the stage for a rate hike in March, under leadership of new Fed chair Jerome Powell.
First posted
