Asian stocks sank Tuesday after a tech sell-off dragged Wall Street lower.
KEEPING SCORE: Tokyo’s Nikkei 225 tumbled 3.2 percent to 21,554.45 and Hong Kong’s Hang Seng lost 1.1 percent. The Shanghai Composite Index was off 0.2 percent at 2,625.37 and Sydney’s S&P-ASX 200 gave up 1.9 percent to 5,825.60. Seoul’s Kospi retreated 1.6 percent to 2,047.10 and benchmarks in New Zealand, Taiwan and Southeast Asia also declined.
WALL STREET: A sell-off in technology companies knocked more than 600 points off the Dow Jones Industrial Average. The wave of selling snared big names including Apple, Amazon and Goldman Sachs. Banks, consumer-focused companies, and media and communications stocks all took heavy losses. That, in turn, weighed on chipmakers. The Standard & Poor’s 500 index lost 2 percent to 2,726.22. The Dow gave up 2.3 percent to 25,387.18. It was down briefly by 648 points. The Nasdaq composite slid 2.8 percent to 7,200.87.
APPLE: The tech stock tumble followed an analyst report that suggested Apple significantly cut back orders from one of its suppliers. That fueled questions about the outlook for tech industries and U.S. economic growth. Apple fell 5 percent after Wells Fargo analysts said the iPhone maker is the unnamed customer that optical communications company Lumentum Holdings said was significantly reducing orders. Shares in Lumentum plunged 33 percent.
ANALYST’S TAKE: “The U.S. morning sell-off in the tech sector triggered the equity rout,” said Stephen Innes of OANDA in a report. “It is hard to overlook the global growth slowdown, while the Trump administration seems set to exert pressure on China trade.” A stronger U.S. dollar usually acts as a “wrecking ball through Asian equities.”
OPEC: Saudi Arabia said the oil cartel and allied crude producers will likely need to cut supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market after U.S. sanctions failed to cut Iran’s output. Khalid al-Falih’s comments showed the balancing act U.S. allies face in dealing with President Donald Trump’s actions. Trump has demanded OPEC increase production to drive down U.S. gasoline prices. Al-Falih, who on Sunday said the kingdom would cut production by more than 500,000 barrels per day in December, said Saudi Arabia gave customers “100 percent of what they asked for.” That appeared to be a veiled reference to Trump.
ENERGY: Benchmark U.S. crude fell 78 cents to $59.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract sank 26 cents on Monday to $59.93. Brent crude, used to price international oils, lost 69 cents to $69.43 in London. It declined 6 cents the previous session to $70.12.
CURRENCY: The dollar declined to 113.89 yen from Monday’s 113.84 yen. The euro gained to $1.1241 from $1.1218.