Bloomberg
Published Nov 29, 2017 20:57
Updated Nov 29, 2017 21:45
Tech Stocks Rout Deepens in Asia as Rally Pauses: Markets Wrap
(Bloomberg) -- A rout in technology stocks spread to Asia from the U.S. as investors sold some of this year’s best performers and assessed the longevity of the global equity bull run.
Japan’s benchmarks fluctuated and Australian shares fell with lenders declining after the government announced an inquiry into banks. A measure of technology companies was the the biggest drag on the MSCI Asia Pacific Index after U.S. tech stocks tumbled amid signs of a rotation away from the year’s leaders into financial stocks as tax legislation proceeded through the Senate. The kiwi dollar took a hit after New Zealand business confidence slumped to the lowest since 2009.
Senate Republicans voted to begin the debate on their sweeping tax-overhaul bill. Optimism the Senate will pass cuts to corporate taxes is buoying sentiment for corporate earnings growth, with Federal Reserve Chair Janet Yellen’s comments that economic growth is “increasingly broad based” sending Treasuries lower as they added to enthusiasm for economic expansion.
Meanwhile, questions are being raised about how long the markets’ rally can be sustained. Goldman Sachs Group Inc (NYSE:GS). said that the prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, which eventually will lead to a bear market. And Credit Suisse (SIX:CSGN) Group AG said that the bull run may be entering the last stretch, before petering out in the second half of 2018. They join Morgan Stanley (NYSE:MS) in warning that next year won’t be easy for equity investors.
In Asia, the Bank of Korea raised its key interest rate to 1.5 percent from 1.25 percent, the first hike in more than six years. Japan’s industrial production picked up in October from a year earlier, the 12th consecutive month of gains, underpinned by exports, which are performing at their best since the global financial crisis.
China’s official factory gauge unexpectedly rose as global demand for products helped cushion the effects of a pollution cleanup as officials order polluting mills to shut down or reduce production during winter.
Elsewhere, oil declined before OPEC meets to decide on prolonging supply cuts past the end of March.
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Written By: Bloomberg
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