Asian markets tumbled on Monday, 8 June as investors rushed to book profits in technology stocks, triggering a sharp pullback in the artificial intelligence-driven rally that had powered global equities to record highs.
South Korea’s KOSPI, heavily weighted toward semiconductor and technology companies, plunged more than 6.8% in volatile trading, prompting a temporary 20-minute trading halt. The index has now fallen about 14% from last week’s record peak.
Japan’s Nikkei 225 also came under pressure, dropping 3.4% in early trade. Meanwhile, US stock futures attempted a modest recovery after a steep selloff on Wall Street at the end of last week.
Investor sentiment was further rattled by renewed geopolitical tensions after Israeli strikes on Beirut pushed oil prices and the higher, adding to concerns over inflation and global economic growth.
The weakness followed Friday’s sharp decline in US markets, where the Nasdaq Composite slumped 4.2% after stronger-than-expected jobs data reinforced expectations that the Federal Reserve may keep interest rates elevated or consider further tightening, weighing heavily on high-growth technology stocks.
Inflation and ECB ahead
The week ahead is headlined by the giant listing, expected to price on Thursday and trade on Friday, but will also have inflation in focus with US consumer price data due on Wednesday and central bank meetings in Canada and Europe.
Last week, bitcoin notched its heaviest weekly drop since the collapse of crypto exchange FTX in late 2022, falling about 16%. It was hovering just shy of $63,000 on Monday.
SpaceX’s debut is expected to be followed by other mega in the coming months from Anthropic and OpenAI, raising so much money that brokers are nervous it could draw down other assets.
“The market regime has potentially shifted from moderate inflation and rate cuts to potential ‘overheating’ contributing to higher Treasury yields, a higher path of short-term interest rates and tighter liquidity,” said Nick Ferres, CIO of Vantage Point Asset Management in Singapore, according to a Reuters report.
The Middle East situation also remains delicate, and Brent crude futures were up about 2.6% to $95.45 a barrel on Monday morning after an Israeli attack on Beirut prompted Iran to direct a salvo of missiles at Israeli targets.
OPEC agreed on Sunday to the fourth increase in its oil output targets in as many months.
In currency trade, the dollar was firm and holding above 160 yen, pushing the Australian dollar to $0.7055. The euro hovered at $1.1531.
(With inputs from Reuters)
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