Stocks
Asian markets plunge with Wall St after Nvidia rout, weak US data
Tech firms led a plunge across Asian markets Wednesday after a rout on Wall Street fuelled by a collapse in chip titan Nvidia and disappointing data on US factory activity that revived recession fears.
The sight of investors running to the hills sparked memories of the brief but tumultuous sell-off at the start of August that was partly fuelled by a big miss on US jobs creation.
All three leading indexes in New York ended sharply lower Tuesday, with the Nasdaq the main casualty — diving more than three percent — as traders dumped big-name tech firms including Apple, Alphabet and Amazon.
But the biggest loser was AI chip leader Nvidia, which tanked 9.5 percent — shedding almost $280 billion of its value — on fears that the surge in firms linked to artificial intelligence may have run too far.
That came amid a warning that spending on all things AI by companies in recent years would need to be justified unless demand outside of the tech realm picked up and that it could take some time to begin paying off.
Adding to the pain, it emerged after US markets closed that US authorities had issued Nvidia and other firms subpoenas as it probes claims they violated antitrust laws.
The selling filtered through to Asia, where tech and chip firms took the brunt of it.
Japan’s Advantest plunged 8.2 percent and Tokyo Electron more than seven percent, while Sony lost 2.3 percent.
TSMC shed more than four percent in Taipei, with SK hynix dumped 6.5 percent in Seoul and Samsung more than two percent off.
That led Asian markets deep into the red.
Tokyo and Taipei each dived more than three percent, while Seoul was more than two percent lower. Hong Kong, Sydney, Singapore and Manila gave back more than one percent.
Shanghai and Wellington were also down.
Worries about the US economy burst back onto the scene after figures showed a marginal improvement in factory activity in August but it still remained in contraction for a fifth successive month.
The figures come days before a closely watched report on non-farm payrolls, which could have a big impact on Federal Reserve officials’ decision-making going into next week’s policy meeting.
The bank is expected to cut interest rates but the debate surrounds how big it will go, with most tipping a 25-basis-point reduction but a below-forecast reading seen boosting the chances of a 50-point move.
While weaker readings on jobs and the economy have in the recent past been seen as positive owing to the chances of the Fed cutting rates, analysts warned that the bad news was now being taken as a worrying sign for the economy.
“A 50-basis-point cut might not be the market’s best friend if it shows up alongside signs of labour market weakness,” said independent analyst Stephen Innes.
“In that scenario, those cuts could be viewed less as a soft landing cushion and more as a last-ditch effort to steer clear of a full-blown economic crash.”
The chances of a bigger Fed rate cut pushed the dollar down against the yen, which had already been given a boost Tuesday by comments from Bank of Japan boss Kazuo Ueda, who said it could hike rates again if the country’s economy and inflation perform as expected.
Oil extended losses after the previous day’s heavy selling sparked by demand worries linked to a weak Chinese economy and questions over the US outlook, while OPEC’s consideration of output hikes added to the pain.
– Key figures around 0200 GMT –
Tokyo – Nikkei 225: DOWN 3.4 percent at 37,378.35
Hong Kong – Hang Seng Index: DOWN 1.6 percent at 17,370.29
Shanghai – Composite: DOWN 0.7 percent at 2,784.85
Dollar/yen: DOWN at 145.40 yen from 145.46 yen on Tuesday
Euro/dollar: UP at $1.1050 from $1.1047
Pound/dollar: DOWN at $1.3105 from $1.3111
Euro/pound: UP at 84.32 pence from 84.17 pence
West Texas Intermediate: DOWN 0.6 percent at $69.89 per barrel
Brent North Sea Crude: DOWN 0.6 percent at $73.34 per barrel
New York – Dow: DOWN 1.5 percent at 40,936.93 (close)
New York – S&P 500: DOWN 2.1 percent at 5,528.93 (close)
New York – Nasdaq Composite: DOWN 3.3 percent at 17,136.30 (close)
London – FTSE 100: DOWN 0.8 percent at 8,298.46 (close)
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
