By Tom Westbrook SINGAPORE (Reuters) -Asian markets were wobbly on Tuesday as relief at the impending end of a U.S. government shutdown began to recede and nagging worries about valuations in the technology sector resurfaced. While gold and the Nasdaq basked in the afterglow of their sharpest gains for months, U.S. futures and Asia’s major […]
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Tech stocks slip in jittery Asia trade
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By Tom Westbrook
SINGAPORE (Reuters) -Asian markets were wobbly on Tuesday as relief at the impending end of a U.S. government shutdown began to recede and nagging worries about valuations in the technology sector resurfaced.
While gold and the Nasdaq basked in the afterglow of their sharpest gains for months, U.S. futures and Asia’s major bourses struggled to hold on to gains.
S&P 500 futures were last about 0.1% lower. European futures were off highs but about 0.3% stronger. Japan’s Nikkei gave up a morning rally to fall 0.5%, with the drag coming from big drops in semiconductor shares. [.T]
Traders were also unsettled by a sharp fall in South Korea’s won, which has been facing heavy selling as both Korean and foreign investors have been cutting positions in the semiconductor-heavy equity market in favour of foreign assets.
The benchmark Kospi retraced morning gains to trade nearly flat. Markets in Hong Kong and China were down around 0.5% by mid afternoon.
“There’s probably a bit of fear about the overheated AI rally – not necessarily any concrete concern,” said Nomura strategist Naka Matsuzawa in Tokyo.
SHUTDOWN COMPROMISE CLEARS SENATE
The U.S. Senate passed a deal on Monday that would restore U.S. federal funding and end the longest shutdown.
It now heads to the House, where Speaker Mike Johnson has said he would like to pass it as soon as Wednesday and send it on to President Donald Trump to sign into law.
Prediction markets, such as the online Polymarket, have reopening nearly fully priced in for the end of the week.
The nearly six-week shutdown will have likely already knocked somewhere between 0.4 and 1 percentage points from fourth-quarter gross domestic product, said UBP economist Carlos Casanova in Hong Kong.
“However, if you look at previous instances, typically what happens is in the quarter after the activity bounces back … so I think what the market is doing is looking ahead one quarter and repricing that rebound.”
On Wall Street the S&P 500 closed up 1.54% for its biggest one-day percentage gain since mid October and the Nasdaq notched its largest daily gain since May.[.N]
Gold sat comfortably above $4,100 an ounce.
YEN HITS NINE-MONTH LOW
Safe havens such as the Japanese yen and U.S. Treasuries initially retreated with the mood favouring risk-taking.
The yen dipped to 154.49 per dollar in the Asia session, its weakest level since February. [FRX/]
The U.S. Treasury market was closed for Veterans Day. However, selling seemed to slow down in Monday’s New York session as traders figured that the resumed publication of U.S. economic data could strengthen the case for a Federal Reserve rate cut in December.
“It’s a bit of a twist … as you’re trying to balance a higher probability of rate cuts (against) people looking to take more risk,” said Andrew Lilley, chief rates strategist at Barrenjoey in Sydney.
“Long-end yields sell off because people start to switch back out of bonds into equities … but with the shutdown lifting news, the front-end yields actually rally because you start to price in more of a chance of a cut.”
Ten-year Treasury yields rose to a high of 4.147% on Monday but finished the session at 4.11%. Demand was strong at a three-year note auction. Three-month T-Bill yields were a fraction higher at 3.88%. [US/]
Benchmark Brent crude oil futures were steady at $63.96 a barrel.
(Editing by Shri Navaratnam and Kim Coghill)