Stocks
Asian markets track tech-led plunge on Wall St, yen extends gains
Asian markets tumbled Thursday after a tech-fuelled sell-off saw Wall Street tank, as disappointing earnings caused traders to panic that a months-long rally in the sector may have been overdone.
Tokyo’s Nikkei led the retreat in equities, with a stronger yen adding to the downward pressure on exporters, while technology giants across the region were deep in the red.
Global stocks have pushed ever higher this year — with New York’s three main indexes hitting multiple records — with tech titans such as Alphabet and chip makers such as Nvidia and TSMC boosted by an explosion of interest in all things linked to artificial intelligence.
The rallies have been helped by blockbuster profits and upbeat outlooks, causing investors to pile more cash in owing to a fear of missing out.
However, with valuations pushing to dizzying heights, analysts have been warning about retreat, and Tuesday’s earnings from Tesla and Google-parent Alphabet provided a selling opportunity.
Tesla said profits fell 45 percent in the second quarter owing to price cuts and aggressive AI investment and while Alphabet beat forecasts, results from YouTube were less upbeat.
The two firms are part of the so-called “Magnificent Seven” tech kings who have been key to the driving gains in markets this year. Tesla shed 12.3 percent and Alphabet gave up five percent.
All three main indexes on Wall Street tumbled, with the Nasdaq shedding more than three percent and the S&P 500 down more than two percent in its worst day since December 2022.
“Investors are now facing the pressing question: How long will it take for these massive investments by hyperscalers to start delivering over-the-top results?” asked analyst Stephen Innes.
“Patience is becoming the new flag-bearer for recent tech stockholders as they wait for these tech bets to pay off,” he added in his Dark Side Of The Boom newsletter.
Asia followed suit, with tech firms among the big losers — Seoul’s SK Hynix dived more than eight percent at one point despite strong earnings, while in Tokyo Sony was off more than four percent and SoftBank more than seven percent.
Hong Kong and Shanghai fell even after a surprise cut in a key rate by the Chinese central bank.
Sydney, Seoul, Singapore, Wellington, Manila and Jakarta were also well in the red.
The Nikkei in Tokyo tumbled more than three percent at one point.
Hideyuki Suzuki, senior analyst at SBI Securities, told AFP that “falls in the US tech sector — especially a plunge in Tesla shares, and disappointing Alphabet earnings — as well as a stronger yen weighed on the market.”
The boom in electric vehicle sales is slowing, and “excessive expectations for AI and other technologies are being corrected,” he said.
However, he added that “it’s not that economic fundamentals are worsening, so shares may rebound after” Japanese and US central bank meetings.
“The yen is higher on speculation that the Bank of Japan may hike interest rates” at its meeting next week, but views are divided, Suzuki said.
The yen extended a rally against the dollar that has been underway in recent weeks, having hit a nearly four-decade low near 162 at the start of this month.
The Japanese unit strengthened to as much as 152.65 per dollar at one point, with Innes saying “traders seem to have shifted from squaring short yen positions to taking long yen bets” ahead of the meeting.
Market watchers are divided on whether Japan’s central bank will raise interest rates again as officials look to normalise their longstanding ultra-loose monetary policy.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 2.5 percent at 38,165.19 (break)
Hong Kong – Hang Seng Index: DOWN 1.5 percent at 17,058.26
Shanghai – Composite: DOWN 0.9 percent at 2,875.61
Euro/dollar: DOWN at $1.0839 from $1.0842 on Wednesday
Pound/dollar: DOWN at $1.2890 from $1.2905
Dollar/yen: DOWN at 152.89 yen from 153.99 yen
Euro/pound: UP at 84.09 pence at 84.08 pence
West Texas Intermediate: DOWN 0.4 percent at $77.30 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $81.40 per barrel
New York – Dow: DOWN 1.3 percent at 39,853.87 (close)
London – FTSE 100: DOWN 0.2 percent at 8,153.69 (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.
