The recent bounces seen in the US technology and momentum-oriented stocks seemed to have fizzled out, and even value “reopening businesses/vaccine optimism” theme-plays had failed to hold the fort.
All major US benchmark stock indices ended in the red yesterday, S&P 500 (-1.0%), Dow Jones (-1.1%), Nasdaq 100 (-0.6%), Russell 2000 (-1.6%). The Nasdaq 100 outperformed the pack yesterday but its intraday price performance did not seem to be advocating a rotation back into technology, momentum and COVID 19 stay-home related stocks that led the overall market since the March 2020 major bottom low for global stock markets. The Nasdaq 100 had only managed to see inflows in the first hour of yesterday’s US session; it printed an intraday high of 11976 before it declined by -1.3% to close at 11827.
S&P sectors performance painted a clearer picture, a sea of red for all 11 main sectors; even the defensive Utilities ended with a loss of -1.73% (the third-worst performing sector) and the broader based Information Technology sector that includes semiconductors and software businesses shed -0.9%.
There wasn't much movement in the foreign exchange market overnight as the US Dollar Index was almost unchanged at 92.96 and Gold futures (COMEX) continued to trade in a sideways below 1895 after the -6% plunge on Monday that saw a retest on the critical 1850 September 2020 swing low.
Over to Asia: Chinese mega tech Tencent Holdings Q3 earnings result surpassed consensus estimates where revenues rose 29% year on year to CNY125,477m and profit attributed to shareholders increased by 32% year on year to CNY32,303m. During its press conference, Tencent’s management reassured investors that the company will comply with the latest antitrust rules imposed the China’s authorities early this week that triggered a wiped out of almost US$290bn off the market value of Tencent and other Chinese big tech firms such as Alibaba, JD.com and Meituan. The share price of Tencent listed on the Hong Kong Exchange rose by 2.3% at this time of the writing.
Overall Asia stock markets are threading lower in line with US with the exception of Hong Kong’s Hang Seng Technology Index (+2.4%) and South Korea’s KOSPI 200 (+0.3%); Japan’s Nikkei 225 (-1.0%), Hong Kong’s Hang Seng Index (-0.5%), China’s CSI 300 (-1.2%), Australia’ ASX 200 (-0.5%), Singapore’s Straits Times Index (-0.4%).
Chart of the day – VIX (futures) on the rise, watch 28.12 resistance nextSource: CMC Markets platform