HSI Closes Week With Fall, Asian Markets Slump
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2020-09-04 HKT 17:11
Hong Kong shares ended more than 1 percent lower on Friday as global markets went into reverse, with investors fretting over high valuations after months of strong gains.
The Hang Seng Index fell 1.3 percent, to 24,695.
On the mainland, the Shanghai Composite Index slipped 0.9 percent, to 3,355 and the Shenzhen Composite Index lost 0.5 percent, to 2,290.
Tokyo, Seoul, Singapore, Mumbai, Jakarta and Wellington all sank more than 1 percent, while Sydney dropped more than 3 percent. Taipei was off 0.9 percent.
Observers said September has historically been a bad month for stocks and that while recent economic data had not been brilliant, it was not bad enough to spark such a sell-off.
"Given the market's seemingly relentless climb higher on the back of the mega-cap tech names, it should be no surprise that a pullback was in the offing as the market became increasingly extended and overbought," Quincy Krosby, at Prudential Financial Inc, said.
And with central banks promising to back up financial markets for the foreseeable future, there are no expectations of a calamitous drop such as that seen in March or the tech bubble crisis two decades ago.
"Corrections are to be expected – a market fuelled by central bank largesse, economic surprises and record earnings beats in the last few months was never going to maintain its heady pace forever," said JP Morgan Asset Management strategist Kerry Craig.
"When it comes to the tech sector and the other online giants that have gained so much in the last few months, there could be profit-taking as we head towards the US presidential election in November.
"Negative headlines on potential regulatory and tax changes are likely to add to investor unease in a market with elevated valuations." (AFP)
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