Tech selloff spreads to Asian, pound steadies

Tokyo - A selloff in US technology stocks spread to Asia, dragging down shares from Seoul to Hong Kong. The British pound held losses as investors assessed the risks from the UK’s political turmoil.

Technology companies on the MSCI Asia Pacific Index tumbled, with Samsung Electronics and Tencent Holdings leading declines. US stock futures fell after the Nasdaq 100 sank 2.4% on Friday.

Sterling was steady after the biggest drop in eight months as Prime Minister Theresa May struggled to keep power in the wake of Thursday’s election.

Oil rose as Saudi Arabia and Russia sought to reassure investors that output cuts by Organisation of the Petroleum Exporting Countries (Opec) and its partners are draining a global glut.

The rout in US tech stocks began when Robert Boroujerdi, global chief investment officer at Goldman Sachs Group, warned that low volatility in Facebook, Amazon.com, Apple, Microsoft and Google parent Alphabet may be blinding investors to risks such as cyclicality and regulation.

"There’s a chance US internet technology stocks that have propelled a global stock rally will now serve as a buzz kill," said Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo.

Washington remains in the spotlight. Attorney General Jeff Sessions offered to speak to the Senate Intelligence Committee to answer questions about alleged Russian meddling in the 2016 presidential election, after fired FBI director James Comey’s testimony on Thursday.

On top of that, investors also face central bank decisions, with the Fed expected to raise interest rates at the conclusion of their two-day meeting.

Here’s what investors will be facing this week:

Theresa May will address the 1922 Committee of rank-and-file Tory lawmakers on Monday, in a meeting that will test her chances of staying in office. Fed policy makers are forecast to raise their benchmark interest rate for the second time this year on Wednesday.

Central banks in Japan and Britain are also scheduled to weigh in with policy decisions this week.

Here are the main moves in markets:
Stocks

Japan’s Topix was little changed as of 1:17 in Tokyo, while the Nikkei 225 Stock Average slid 0.5%, weighed down by declines in Fast Retailing and SoftBank Group. South Korea’s Kospi lost 1%, with Samsung slumping 1.7%. Also, North Korea said it has moved closer to test-firing an intercontinental ballistic missile with the potential of hitting the US mainland.

Hong Kong’s Hang Seng Index declined 1.2%, as Tencent Holdings fell 2.6%. The Shanghai Composite Index retreated 0.5%, after a four-day rally. Markets in Australia, Malaysia and the Philippines are closed for holidays. S&P 500 Index futures slipped 0.1%.

The benchmark gauge fell 0.1% on Friday, while the tech-heavy Nasdaq Composite Index dropped 1.8%. Apple sank 3.9%, while Microsoft, Amazon, Facebook and Alphabet all lost more than 2%.

Currencies

The pound rose 0.1% to $1.2760, after dropping 1.6% on Friday. The euro rose 0.1% to $1.1208. The South Korean won fell 0.3%.

The Bank of Korea may need to adjust easing if the economy’s recovery continues, Governor Lee Ju-yeol said in a prepared statement for the central bank’s 67th anniversary. The yen added less than 0.1% to 110.29 per dollar, after three days of declines.

Bonds

The yield on 10-year Treasuries headed higher for a fourth day, advancing two basis points to 2.22%.

Commodities

West Texas crude gained 0.6% to $46.10 a barrel. Oil slumped almost4% last week as an unexpected increase in US stockpiles cast doubt on Opec’s ability to rebalance world crude markets. 

Gold rose less than 0.1% to $1 267.16 an ounce, after three days of declines.