International shares fell, following a sharp technology-led selloff in American markets, but U.S. futures pointed to a calmer session ahead.
By late morning Friday Hong Kong time, the city’s Hang Seng Index had lost 1.7%, while Australia’s S&P/ASX 200 was down 2.5%. The Shanghai Composite and Japan’s Nikkei 225 had both retreated about 1.1%, and South Korea’s Kospi Composite was off 1.4%.
All times ET
S&P 500 futures edged down 0.3%, suggesting U.S. stocks were likely to come under far less pressure on Friday than in the previous session.
Eli Lee, head of investment strategy at Bank of Singapore, said the pullback following a steep run-up in stocks appeared similar to an earlier market retrenchment in June, and he didn’t see scope for a deep correction.
“In the longer term, low interest rates and the gradual recovery in the global economy will be supportive for risk assets,” said Mr. Lee, using a term for comparatively riskier financial investments such as stocks, corporate bonds and commodities.
Mr. Lee said he favors the markets in China now, given the strength in the Chinese yuan and the country’s rapid recovery from the pandemic. “Its economy, on a relative basis, is on a firmer footing compared to the rest of the world,” he said.
The Chinese currency traded at around 6.84 to the dollar in both the tightly controlled onshore market and freer offshore markets.
On Thursday, U.S. stocks fell sharply in their worst showing since June. The tech-heavy Nasdaq Composite declined nearly 5%, its biggest one-day percentage loss since June 11. The S&P 500 fell 3.5% and the Dow Jones Industrial Average retreated 2.8%.
Kerry Craig, global market strategist at J.P. Morgan Asset Management, said uncertainties around coronavirus vaccines and the coming U.S. presidential election are weighing on investors’ minds, and would keep markets in check. “[Investors] are waiting for clarity on these two events,” said Mr. Craig.
As of Friday morning Hong Kong time, the yield on the benchmark 10-year U.S. Treasury note was at 0.637%, up from 0.621%. Bond yields rise as prices fall.
The most actively traded futures contract for Brent crude, the global oil benchmark, was down 0.7% to $43.78 a barrel, while the equivalent for gold was up 0.5% to $1,948 a troy ounce.
Write to Chong Koh Ping at email@example.com
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