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A selloff in technology shares spread to Asia, sending benchmark indexes tumbling from Sydney to Hong Kong as disappointing results from Amazon.com Inc. heightened concerns about corporate earnings.
The dollar halted a rebound while oil pared a weekly gain.
Samsung Electronics and Tencent Holdings had the biggest declines in the MSCI Asia Pacific Index, dragging down tech shares from the highest level since 2000. US equity futures slumped as Amazon.com dropped in after-hours trading.
The yen strengthened against the dollar, while the euro rallied to the highest since January 2015 against the Swiss franc. Crude slid for the first time in five days.
US stocks have rallied to records amid signs of solid economic growth globally and as more than three-quarters of S&P 500 companies have delivered earnings that beat forecasts.
Technology shares have led the charge, with companies soaring 22% this year for the best performance among 11 groups in the S&P 500. The sector trades at an average 19 times projected earnings.
"With Amazon’s earnings falling short of estimates, the US market may readjust its expectations," Hideyuki Ishiguro, a senior strategist at Daiwa Securities in Tokyo, said.
"Investors are becoming increasingly wary over the historically low volatility levels, with a host of key economic data coming out in the US."
Stocks were rattled in the US on Thursday after JPMorgan Chase derivatives strategist Marko Kolanovic said the market’s volatility drought could presage protracted histrionics. Attention remains on corporate results ahead of a report on US second-quarter growth.
Financial markets have fluctuated this week following a Federal Reserve statement indicating concern about inflation. Policy makers are expected to begin reducing the Fed’s $4.5trn balance sheet in September even as they avoid rushing to raise interest rates.
Here are some key events that wrap up this week:
The US economy probably accelerated in the second quarter to a 2.5% annualised pace, fuelled by a pickup in consumer spending after a slowdown at the start of the year. Corporate results due on Friday include Nomura Holdings, Exxon Mobil, and Barclays.
Here are the main moves in markets:
Stocks
The MSCI Asia Pacific Index dropped 0.7% as of 2:14pm in Tokyo, erasing its gain for the week. Technology shares in the gauge fell 1.5%. Futures on the S&P 500 Index declined 0.3%, while Nasdaq futures lost 0.6%.
South Korea’s Kospi index slumped 1.6%, with Samsung tumbling 4.4%, its biggest loss since October. Hong Kong’s Hang Seng Index lost 0.6%, with Tencent dropping 1.1%.
Benchmark indexes in Australia, Taiwan and Singapore were down more than 0.9%. The Shanghai Composite Index was little changed. Japan’s Topix index fell 0.4%.
Data on Friday showed that while household spending in Japan rose 2.3%, its first gain in more than a year, Japan’s key price gauge was unchanged in June.
Currencies
The yen rose 0.2% to 111.07 per dollar, leaving it little changed for the week. The euro strengthened 0.1% to $1.1687. It gained 0.6% to 1.13345 Swiss francs, climbing for a fourth day.
Read more about the euro-franc pair’s move here. The Bloomberg Dollar Spot Index was slightly lower after rallying 0.4% on Thursday. The gauge is flat for the week.
Bonds
The yield on 10-year Treasuries slid one basis point to 2.30%, 10-year Australian government notes were steady at 2.69%.
Commodities
West Texas Intermediate fell 0.3% to $48.89 a barrel. Oil is still up 6.8% for the week, its best performance since the end of June, as sliding US inventories and signs of stronger demand raise speculation a supply glut in the world’s biggest consumer may ease.
Copper fell 0.7% after a five-day rally.
That pared the week’s gain to 4.7%, still the best performance since early in February. Gold fell less than 0.1% to $1 258.17 an ounce. The precious metal is on course for a third week of gains.
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