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Asian Markets Fall Modestly, Unburdened by Big Names in Tech Asian and European Stocks Fall After Wall Street Slump
(about 4 hours later)
HONG KONG — Asian markets fell on Tuesday after a tough day on Wall Street but were spared the full extent of the pain felt in the United States, thanks in part to a dearth of big technology names that trade in the region. FRANKFURT — Asian and European markets fell on Tuesday after a tough day on Wall Street, but they were spared the full extent of the pain felt in the United States, in part because fewer big technology names trade in those regions.
Markets in Asia were down less than 1 percent by midday after a sharper drop the day before in New York, suggesting that Wall Street’s painful Monday would not turn into a global rout. Underlining that point, futures that track major United States stock indexes were modestly higher in Asian trading on Tuesday, meaning that many investors see a better day coming. Most markets in Asia fell after a sharp drop the day before in New York. European stocks were down less than 1 percent in morning trading, suggesting that Wall Street’s painful Monday would not turn into a global rout. Underlining that point, futures that track major United States stock indexes were modestly higher in European trading on Tuesday, meaning that many investors see a better day coming.
For the most part, global markets are responding to the same signals. Investors around the world have been unnerved by the prospect of a full-blown trade war between the United States and China as the two erect tit-for-tat trade barriers.For the most part, global markets are responding to the same signals. Investors around the world have been unnerved by the prospect of a full-blown trade war between the United States and China as the two erect tit-for-tat trade barriers.
More generally, global markets have risen roughly in tandem over the past couple of years as the economies of the United States, Europe and China have appeared to all be humming along together at a healthy clip for the first time in years. After such a long run-up, many investors naturally wonder how much longer the good times will last. More generally, global markets have risen roughly in tandem over the past couple of years as the economies of the United States, Europe and China appeared to be humming along together at a healthy clip for the first time in years. After such a long run-up, many investors naturally wonder how much longer the good times will last.
But Monday’s slump in the United States has another driver that other world markets lack: big-time technology companies. “We think the time has come to reassess the one-way bet on a continued and strengthening global economic expansion,” Carl B. Weinberg, chief international economist at High Frequency Economics in White Plains, N.Y., said in a note to clients on Tuesday.
Amazon, Facebook, Microsoft, Intel and Tesla were among the major contributors to Monday’s stock slump on Wall Street. Amazon faces pressure from President Trump, while Facebook continues to grapple with privacy concerns and Tesla has been hit by a succession of negative headlines. But Monday’s slump in the United States had another driver that world markets do not: big-time technology companies.
Tech shares were among the worst performers in other markets too, like China, Japan and Hong Kong. But the world’s biggest technology companies primarily trade in the United States. Amazon, Facebook, Intel, Microsoft and Tesla were among the major contributors to Monday’s stock slump on Wall Street. Amazon faces pressure from President Trump, while Facebook continues to grapple with privacy concerns and Tesla has been hit by a succession of negative headlines.
China is home to digital giants like the Alibaba Group, the online retailer. But many Chinese technology companies, like Alibaba, trade in the United States as a way to reach global investors. Alibaba’s shares joined the American tech rout on Monday, falling more than 3 percent, while shares of the Chinese search company Baidu fell more than 1 percent. Tech shares were among the worst performers in other markets too, like China, Hong Kong and Japan. But the world’s biggest technology companies primarily trade in the United States.
China is home to digital giants like the Alibaba Group, an online retailer. But many Chinese technology companies, like Alibaba, trade in the United States as a way to reach global investors. Alibaba shares joined the American tech rout on Monday, falling more than 3 percent, while shares of the Chinese search company Baidu fell more than 1 percent.
The woes of tech companies may even be positive for some European companies. Tesla’s battery powered cars and self-driving technology were a threat to European luxury carmakers like BMW, Daimler and Volkswagen’s Audi unit, which remain heavily invested in internal combustion engines.
But Tesla is having trouble ramping up production fast enough to meet demand, and its vehicles have suffered quality problems. Tesla’s difficulties support the argument that German carmakers have made all along: Mass producing cars is hard, and it will not be easy for new challengers to match the expertise of traditional carmakers.
At the very least, Tesla’s problems could buy time for established carmakers to develop their own electric vehicles and autonomous driving technology.
Shares of BMW, Daimler and Volkswagen still fell Tuesday morning. All three depend heavily on sales in Asia and would suffer from any economic turmoil there.
One notable exception to the trend toward trading in the United States is Tencent Holdings, a Chinese social media and gaming conglomerate that trades in Hong Kong. Its shares were down less than 1 percent midday on Tuesday.One notable exception to the trend toward trading in the United States is Tencent Holdings, a Chinese social media and gaming conglomerate that trades in Hong Kong. Its shares were down less than 1 percent midday on Tuesday.