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)
Dhaka Stock Market DSE, Bourse on the last working day of the week, 19th September, ended with a hike in Indices and Turnover from the previous working session. This information is known from DSE sources.
594 crore 77 lakh taka shares were traded on this day. 41 crore 11 lakh less tradings were done in DSE today compared to the previous workday, 18th September, Shares worth Tk 553 crores 65 lakh shares were traded last time, Wednesday.
The benchmark DSEX added 41.13 points or 5,735 The Shariah-based index DSES gained 12.13 point or 1,257 and the blue-chip index DS30 increased by 29.46 points or 2,106.
Of the issues traded, 150 advanced, 191 declined and 56 remained unchanged.
SK Trims Limited ranked top gainer on DSE, the share price increased by Tk 1.50 paisa or 8.57 percent. On this day, the share was last traded at Tk 19.00 paisa.
Hami Industries PLC ranked top loser on the DSE, the share price dropped by Tk 9.80 paisa or 9.40 percent. On this day, the share was last traded at Tk 94.50 paisa.
DSE topped on trade is grameenphone Limited 31 crore 47 lakh takas of company shares have been traded.
A total of 33 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 70 lakh 41 thousand 263 shares of the companies were traded. The financial value of which is 49 crore 16 lakh taka.
Tokyo’s Nikkei led Asian markets higher Thursday as the yen hit a two-week high after the Federal Reserve announced a bumper interest rate cut and pledged a series of further reductions that boosted sentiment.
After a keenly awaited meeting the US central bank decided to lower borrowing costs for the first time since the start of the pandemic by opting for a half-point reduction.
However, the bigger of two options — some had expected a 25-basis-point cut — split opinion, with some warning it could reignite inflation while others said it showed the bank was keeping ahead of the curve in supporting the economy in light of weak jobs data.
The bank’s “dot plot” guidance indicated another 50 points of reductions before January, followed by 100 next year and 50 in 2026.
After the meeting, Fed boss Jerome Powell said the economy was in “good shape” pointing to lower inflation and solid growth.
“The labour market is in a strong place. We want to keep it there,” he told reporters.
But he cautioned that the central bank would “go carefully” and weigh the matter “meeting by meeting” as it looks to keep easing.
“It is time to recalibrate our policy to something that is more appropriate, given the progress on inflation, and on employment moving to a more sustainable level.
“This is the beginning of that process.”
Equities have rallied through the year on expectations the cycle of tightening, which started in 2022, would come to an end this year as inflation slows and the labour market softens.
But, after an initial burst higher following the announcement — pushing the S&P 500 to a new record — Wall Street retreated and ended in the red.
Analysts pointed out that investors had largely factored in 125 points of reductions this year, so a correction in valuations was to be expected.
Christian Hoffmann at Thornburg Investment Management said: “Considering the one dissenting voice from a governor… the Fed must have grappled with concerns not just about doing too much versus too little, but also concerns about signalling to markets, and perhaps more subtly, political optics and legacy considerations.
“The setup for this meeting was not ideal. With the market almost evenly split between a 25 basis point and 50 basis point cut, hopes were bound to be dashed. On top of that, US equity indices rallied nearly every day last week and are flirting with all-time highs and elevated valuations.”
Asian markets brushed off the weak US lead and mostly rose, with Tokyo piling on more than two percent as exporters were boosted by a weaker yen, which hit almost 144 per dollar, a level last seen at the start of the month.
That was just days after breaking below 140 for the first time since last summer.
There were also healthy gains in Hong Kong, where the de facto central bank lowered its own rates owing to the city’s currency peg to the dollar, while Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta also advanced.
Investors are now turning their attention to the Bank of Japan’s policy meeting, which concludes Friday and is expected to see officials stand pat, having sent markets into turmoil last month with a surprise hike — after doing so earlier this year for the first time since 2007.
Gold was sitting around $2,550, having burst to a new record high above $2,600 as the prospect of lower rates makes the precious metal more attractive as an investment.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: UP 2.5 percent at 37,284.43 (break)
Hong Kong – Hang Seng Index: UP 0.6 percent at 17,757.70
Shanghai – Composite: UP 0.3 percent at 2,725.31
Dollar/yen: UP at 143.61 yen from 142.29 yen on Wednesday
Pound/dollar: DOWN at $1.3182 from $1.3207
Euro/dollar: DOWN at $1.1092 from $1.1120
Euro/pound: DOWN at 84.14 pence from 84.17 pence
West Texas Intermediate: DOWN 0.8 percent at $70.37 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $73.26 per barrel
New York – Dow: DOWN 0.3 percent at 41,503.10 (close)
London – FTSE 100: DOWN 0.7 percent at 8,253.68 (close)
The Bangladesh Securities and Exchange Commission (BSEC) has appointed two new independent directors to the Dhaka Stock Exchange (DSE) board, following a dispute that prevented the previous appointees from assuming their positions. Additionally, seven independent directors have been appointed to the Chittagong Stock Exchange (CSE). These decisions were made during a commission meeting held on September 18, 2024.
According to a press release from BSEC, the newly appointed independent directors for the DSE are AF Nesaruddin, partner at Hoda Vasi Chowdhury and Co., and Syeda Zakeerin Bakht Nasir, chief consultant and CEO of Z N Consultants. They will replace KAM Majedur Rahman and Helal Uddin, who were unable to take up their roles due to concerns over their appointments violating board regulations. Both individuals have since declined their positions.
The seven independent directors appointed to the CSE are Alamgir Morshed, CEO of Infrastructure Development Company; Professor Saiful Islam from BUET; AKM Habibur Rahman, former managing director of Teletalk; Professor Mahmud Hassan from North South University; M Zulfiquar Hussain, CEO of Grow n Excel; Naznin Sultana, Finance Director at Asian University for Women; and Farida Yasmin, Deputy Secretary at the Financial Institutions Division.
This reshuffling follows a political shift in early August, after which the BSEC verbally requested all independent directors from both the DSE and CSE to resign. On September 1, the BSEC had already appointed seven independent directors to the DSE, though none have yet assumed their roles.
The DSE board, as per the demutualisation scheme, consists of 13 members: seven independent directors, five shareholder directors (one representing strategic investors), and the managing director, who serves as an ex-officio member.
