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Asian stock indexes were expected to trade in narrow ranges after a mixed day on Wall Street as investors believed the tech sector rally was losing steam.
Article Author:
Bloomberg News
Jason Scott
Published June 24, 2024 • 3-minute read
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(Bloomberg) — Asian stock benchmarks are expected to trade in tight ranges after a mixed day on Wall Street on views that the technology sector rally is losing steam.
Futures indicated Hong Kong and Australian stocks were likely to edge up slightly early Tuesday, while Japanese shares were flat.As various sectors outside of technology rose on Monday, Nvidia Inc. extended its roughly $430 billion three-day rout, crossing the threshold for a technical correction.But the chipmaker at the center of the artificial intelligence revolution is up nearly 140% this year and remains the most expensive stock in the benchmark index.
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The S&P 500 was below 5,450. Energy and financial stocks rose as technology stocks fell. The Nasdaq 100 fell more than 1% after approaching 20,000 last week. Nvidia fell 6.7% on Monday. An index of semiconductor makers fell 3%, with 29 of 30 stocks falling. The Dow Jones Industrial Average outperformed.
“We remain concerned about a near-term unwinding for many of the biggest names this year,” said Jonathan Krinsky at BTIG. “Bulls need to expect continued rotation beneath the surface if the S&P 500 is to avoid a major sell-off into July.”
The yield on the 10-year Treasury note fell 2 basis points to 4.23% and Bitcoin sank below $60,000 before rebounding early Tuesday. The cryptocurrency market is piling up losses after posting its second-worst weekly drop in 2024, reflecting waning demand for bitcoin exchange-traded funds and uncertainty over monetary policy.
In Asia, traders are watching for signs of further pressure on China, the world's second-largest economy. Data released on Monday showed China's fiscal revenues fell at the fastest pace in more than a year, raising hopes the government may make another unusual mid-year budget revision to help the economy recover.
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Meanwhile, Japan's top monetary authority warned that with the yen under pressure approaching its lowest level in nearly 34 years, authorities are ready to intervene in the market around the clock if necessary.
In the US, more than a quarter of respondents to the latest MLIV Pulse survey plan to reduce their stock holdings in the next month, compared with 19% who expect to increase their holdings, creating the largest gap between potential buyers and sellers since October.
According to an average of 586 respondents, the S&P 500 is expected to finish the year at 5,606, less than 3% higher than current levels and indicating there is little room for growth after a 14% gain so far in 2024. Additionally, nearly half of survey participants expect a correction to begin later this year.
Oil prices rose, but were supported by a weaker dollar and rising tensions with Russia. The weaker dollar also helped gold prices claw back some of Friday's losses, rising 0.3%.
Major events this week:
US Conference Board consumer confidence, Tuesday Federal Reserve's Lisa Cook, Michelle Bowman speak, Tuesday US new home sales, Wednesday China industrial profits, Thursday Eurozone economic confidence, consumer confidence, Thursday US durable goods, jobless claims, GDP, Thursday Nike reports earnings, Thursday Japan Tokyo Consumer Price Index, unemployment rate, industrial production, Friday US personal consumption goods inflation, spending and income, University of Michigan Consumer confidence, Friday Federal Reserve's Thomas Barkin speaks, Friday
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Some of the key market developments:
stock
S&P 500 futures were little changed as of 7:29 a.m. Tokyo time. Hang Seng futures were up 0.5%. S&P/ASX 200 futures were up 0.5%.
currency
The Bloomberg Dollar Spot Index fell 0.3%. The euro was little changed at 1.0734 to the dollar. The Japanese yen was little changed at 159.60 to the dollar. The offshore yuan was little changed at 7.2832 to the dollar. The Australian dollar was little changed at 0.6656 to the dollar.
Cryptocurrency
Bitcoin rose 1.1% to $60,122.26, while Ether rose 1.1% to $3,344.63.
Bonds
The yield on the 10-year government bond fell 2 basis points to 4.23%. Japan's 10-year government bond yield rose 1.5 basis points to 0.985%. Australia's 10-year government bond yield was little changed at 4.22%.
merchandise
West Texas Intermediate crude oil was little changed and spot gold was little changed.
This story was produced with assistance from Bloomberg Automation.
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