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GLOBAL MARKETS-Asian shares slump as Wall St erases all of 2018 gains

Published 25/10/2018, 11:39 am
© Reuters.  GLOBAL MARKETS-Asian shares slump as Wall St erases all of 2018 gains
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(Recasts, adds analyst quotes, updates prices)

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Nikkei hits 6-mth lows, Aussie shares skid 2 pct

* Wall St suffers worst one-day fall since 2011

* Chip stocks hammered amid earnings, economic worries

* Bonds rally on safety bid, U.S. dollar and yen in demand

By Wayne Cole and Swati Pandey

SYDNEY, Oct 25 (Reuters) - Asian shares dived on Thursday as hundreds of billions of dollars haemorrhaged from global markets after a rout in tech stocks inflicted the largest daily decline on Wall Street since 2011, wiping out all its gains for the year.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.7 percent. Japan's Nikkei .N225 slumped more than 3 percent to hit a six-month trough and Australian shares .AXJO skidded about 2 percent to a more than one-year low.

Tokyo's Topix index .TOPX tumbled 3 percent, evaporating $155 billion in market value in the first 15 minutes of trading.

The dive in formerly high-flying U.S. tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries US10YT=RR falling the most since May to 3.11 percent.

"Weak U.S. housing data, mixed corporate earnings results, trade war fears and concerns regarding a slowing global economy all contributed to the sell off," Sydney-based Rivkin Securities said in a morning note to clients.

"Investor sentiment remains cautious as we anticipate the reports of over 100 S&P 500 companies including Amazon AMZN.O , Alphabet GOOGL.O and Comcast CMCSA.O ."

Weak readings on manufacturing in Europe added to angst over world growth, as did a surprise slump in U.S. home sales, which suggested rising mortgage rates were sapping demand for housing. to the air of tension, police intercepted suspected bombs mailed to former U.S. President Barack Obama, Hillary Clinton and other high-profile Democrats, as well as to CNN, in what New York officials branded an act of terrorism. growing international pressure on Saudi Arabia over the death of journalist Jamal Khashoggi also weighed on investor sentiment. Wall Street, disappointing forecasts from chipmakers hammered the tech sector. They followed weaker-than-expected forecasts on Tuesday from industrial giants Caterpillar (NYSE:CAT) CAT.N and 3M (NYSE:MMM) MMM.N . Nasdaq .IXIC closed down 12.4 percent from its Aug. 29 record closing high, falling 4.4 percent for the day in its biggest one-day percentage decline since Aug. 18, 2011.

In dollar terms, the Nasdaq vapourised $524 billion in market capitalisation overnight.

The Dow fell 2.41 percent and the S&P 500 .SPX lost 3.09 percent.

According to data analysed by Reuters, the proportion of stocks, regions and sectors that are technically in a bear market has shot up since the start of January, prompting some analysts to conclude the bull run may already be over. across Citi trading floors is that recent price action is very much driven by sentiment and short-term positioning," Citibank analysts said in a note.

"It will be the price action, less the earnings results themselves, that will indicate to investors that it might be safe to go back in the water."

In foreign exchange markets, client participation on both spot and options was fairly light, Citi noted.

Funds flowed to the U.S. dollar and Treasuries and out of the euro and the British pound.

The euro shed 0.7 percent to $1.1397 EUR= and breached a major chart bulwark at $1.1430. It was last at $1.1401.

Against a basket of currencies, the dollar paused near a nine-week peak and was last trading at 96.351 .DXY . USD/

Sterling hit a seven-week trough $1.2865 GBP= , having dropped 0.8 percent overnight. It was last a shade higher at $1.2888.

The yen got the usual safe-haven bid, with the euro skidding to a two-month low at 127.68 yen EURJPY= . Even the high-flying dollar eased to 111.85 yen JPY= .

Oil prices slipped amid concerns over global growth.

Brent crude LCOc1 fell 56 cents to $75.61 a barrel, while U.S. crude dropped 56 cents to $66.26 CLc1 . O/R

Spot gold XAU= was a tad firmer at $1,235.70 an ounce.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes)

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