Published: Sat, February 10, 2018
Hi-Tech | By Ellis Neal

Markets Right Now: Asian markets recouping losses early

Markets Right Now: Asian markets recouping losses early

Both the Dow Jones industrial index, which consists of 30 big USA firms, and the S&P 500, which is considered a broader market barometer, had erased their gains for this year on Monday.

US stocks swooned Friday and Monday as investors anxious that accelerating inflation and higher interest rates could derail the market's record-setting rally.

S&P 500 e-minis ESc1 were down 13.75 points, or 0.53 percent, with 1,173,713 contracts traded.

The way we sometimes think - and the news media talks - about markets can make sell-offs like Monday's seem more dramatic than they are. "What we have now is what I call fear of getting caught", said Tom Martin, senior portfolio manager with Globalt Investments. Numerous companies that rose the most over the previous year have borne the brunt of the selling.

Thursday's losses were steady, rather than the sharp falls seen over the past few days, however. The implications include rising interest rates, the possibility of inflation and surging government deficits.

After huge gains in the first weeks of this year, stocks tumbled after the Labour Department said workers' wages grew at a fast rate in January.

After huge gains over the course of 2017 and a January jobs report that showed significant wage increases, analysts became anxious the Federal Reserve would hike interest rates sooner than expected, causing market volatility as investors looked to lock in gains.

The benchmark Dow Jones industrial average was up 0.5 per cent, or 120 points, to 24,466 in the afternoon after losing about 500 points at the opening of trading. Boeing, Goldman Sachs and Home Depot took some of the worst losses.

The S&P 500 index showed 2 new 52-week highs and no new lows, while the Nasdaq recorded 13 new highs and 21 new lows.

The broad-based S&P 500 gained 1.3% to 2,683.32, while the tech-rich Nasdaq Composite Index advanced 1.2% to 7,084.66.

The up-and-down trading Friday came a day after the market entered its first correction in two years.

Investors remain fearful that signs of rising inflation and higher interest rates could stifle the bull market that has pushed stocks to record high after record high in recent years.

Traders are still braced for more volatility as they try to figure out if the swings over the past few days are the start of a deeper correction or just a temporary blip in the United States market's nine-year bull run.

The gains across the pond, however, did not spread to Asian markets, with the majority posting losses. It fell 76 cents, or 1.2 percent, to close at $63.39 a barrel in New York Tuesday. Asia's bid for a recovery faltered late in that session, with the MSCI Asia Pacific Index nearly completely erasing a gain of as much as 2.4 percent.

The US dollar was barely up against a basket of currencies, paring gains as Wall Street rallied late.

Japan's benchmark Nikkei 225 index surged as soon as trading began as investors sought bargains, finishing morning trading up 3.1 percent at 22,270.56.

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