Tech selloff casts gloom over markets

The Star

7 hours ago

A woman walks past an electronic screen displaying the stock index prices of Asian countries outside a brokerage in Tokyo, Japan April 24, 2025. REUTERS/Issei Kato
SINGAPORE: Global share markets came under pressure on Wednesday after a tech-led selloff on Wall Street, while the dollar gained some ground ahead of a key meeting of central bankers later in the week.
Stock futures pointed to a lower opening in Europe and most Asian bourses were in the red, with tech-heavy indexes in Taiwan and South Korea among the biggest losers, in part due to worries about the Trump administration's growing influence on companies in the sector.
U.S. Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel as well as other chip companies in exchange for grants under the CHIPS Act that was meant to spur factory-building around the country, sources told Reuters.
The move comes on the back of other unusual deals Washington has recently struck with U.S. companies, including allowing AI chip giant Nvidia to sell its H20 chips to China in exchange for the U.S. government receiving 15% of the revenue from those sales.
"These developments signal that the U.S. government is heading in a concerning and more interventionist direction," said Tony Sycamore, a market analyst at IG.
MSCI's broadest index of Asia-Pacific shares outside Japan slid more than 1%, while EUROSTOXX 50 futures lost 0.64% and DAX futures shed 0.63%.
S&P 500 futures dipped 0.27% and Nasdaq futures lost 0.44%, extending a fall from the cash session overnight.
Japan's Nikkei lost 1.7% and Hong Kong's Hang Seng Tech Index shed 1.3%.
In commodities, oil prices trimmed losses from the previous session, as investors awaited the next steps in talks to end Russia's war on Ukraine, with uncertainty over whether oil sanctions might be eased or tightened.
While a meeting between U.S. President Donald Trump, Ukrainian President Volodymyr Zelenskiy and a group of European allies over the Russia-Ukraine war concluded without much fanfare, Trump said the United States would help guarantee Ukraine's security in any deal to end Russia's war there.
He later said on Tuesday that the United States might provide air support to Ukraine, while ruling out putting U.S. troops on the ground.
"The U.S. is not categorically underwriting anything, any security for Ukraine, even if they're open to provide some, because we don't know the conditions under which they will. So there's quite a bit of risk left out there," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.
Brent crude futures were last up 0.15% at $65.89 a barrel, while U.S. crude tacked on 0.1% to $62.41 per barrel.
AWAITING JACKSON HOLE
All eyes are now on the Kansas City Federal Reserve's August 21-23 Jackson Hole symposium, where Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework on Friday.
Focus will be on what Powell says about the near-term outlook for rates, with traders almost fully pricing in a rate cut next month.
"Given the apparent tensions between U.S. CPI and PPI data, (it) does come across as ... premature to declare one way or the other. And most importantly, given this kind of dilemma embedded within the data, it is hard to decipher whether the Fed would take or would emphasise the risks that start to mount on the job side of the equation or (the) need to sit firm," said Mizuho's Varathan.
Ahead of the gathering, the dollar firmed slightly, pushing the euro down 0.13% to $1.1633, while sterling fell 0.16% to $1.3470.
The New Zealand dollar tumbled more than 1% after its central bank cut rates as expected and flagged further reductions in coming months as policymakers warned of domestic and global headwinds to growth. The kiwi last bought $0.5835.
Elsewhere, spot gold fell 0.07% to $3,312.89 an ounce. - Reuters