U.S. and European stock markets fell on Tuesday ahead of a Federal Reserve policy meeting and earnings reports from major tech companies.
Analysts attributed the US pullback to profit taking after soaring prices in recent days.
Meanwhile, Hong Kong led a massive sell-off in most Asian stock markets, extending the previous day’s losses as traders were frightened by China’s latest crackdown on a range of sectors.
In the United States, the tech-rich Nasdaq ended with a loss of 1.2% on a gloomy day felt across all indices. Wall Street had hit record highs in the past two sessions, with enthusiasm over strong corporate earnings offsetting concerns about the Delta variant of Covid-19.
“Today is profit taking after a big run,” Briefing.com analyst Patrick O’Hare said, adding that tech investors have taken note of Tesla’s 2% drop despite the Announcing sky-high profits after markets closed on Monday.
A similar dynamic could be happening with Apple, Google’s parent Alphabet, and Microsoft, all of which fell about 1% or more ahead of the quarterly reports to be released later Tuesday.
Investors are focused on the Federal Reserve’s policy announcement slated for Wednesday, and while the U.S. central bank is expected to maintain easy monetary policies, it may offer clues as to when it may change course on its strategy. purchase of bonds.
O’Hare said investors were not worried about a major change in the Fed’s messaging, expecting the U.S. central bank to maintain its “wait and watch” strategy, even with the threat posed by the rapidly spreading Delta variant of Covid-19.
– Asian sale –
In Europe, shares of London closed 0.4%, Frankfurt 0.6% and Paris 0.7%, in part due to events in Asia.
Hong Kong sank more than 4% to match Monday’s drop after Beijing instituted new regulations on China’s tutoring sector – which hit private education companies – along with other measures against tech companies and new rules for real estate and food delivery companies.
“The weakness seen in Europe today appears to be a by-product of broader fears that a political misstep by Beijing could have broader consequences for the global economy,” said Michael Hewson, chief market analyst at CMC Markets UK.
These moves are making investors wonder where Beijing will hit next.
“China’s regulatory uncertainty will not go away,” said Rodrigo Catril of National Australia Bank.
“Indeed, it appears to be widening, with no specifics as to when and where it will end.”
Tencent was also hit after being ordered to relinquish exclusive rights to the music label due to apparent violations of antitrust laws. Its shares fell 10%, while Alibaba lost more than 6%. The Meituan food delivery company lost more than 17 percent.
– Key figures around 2045 GMT –
New York – Dow: DOWN 0.2% to 35,058.52 (close)
New York – S&P 500: DOWN 0.5% to 4,401.46 (close)
New York – Nasdaq: DOWN 1.2% to 14,660.58 (close)
EURO STOXX 50: DOWN 0.9% to 4,064.83 (closing)
London – FTSE 100: DOWN 0.4% to 6,996.08 (close)
Frankfurt – DAX 30: DOWN 0.6% to 15,519.13 (closing)
Paris – CAC 40: DOWN 0.7% to 6,531.92 (closing)
Tokyo – Nikkei 225: UP 0.5% to 27,970.22 (close)
Hong Kong – Hang Seng Index: DOWN 4.2% to 25,086.43 (closing)
Shanghai – Composite: DOWN 2.5% to 3,381.18 (close)
Euro / dollar: up to $ 1.1818 from $ 1.1802 at 21:25 GMT
Euro / pound: DROP to 85.13 pence against 85.41 pence
Pound / dollar: At $ 1.3879 vs. $ 1.3815
Dollar / yen: LOWER to 109.78 yen against 110.37 yen
North Sea Brent: Up 0.3% to $ 74.72 per barrel
West Texas Intermediate: FLAT at $ 71.90 per barrel
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