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European Shares Dragged Down by Weak US Tech Sector; Asia-Pacific Markets Dodge the Tech Rout

By:
James Hyerczyk
Published: Sep 8, 2020, 13:06 UTC

European shares fell on Tuesday as steep declines in the dominant U.S. tech sector continue to weigh on investor sentiment.

S&P 500

Global equity markets finished mixed on Tuesday with the major Asia-Pacific shares rising and European shares retreating as tech shares continued to struggle. Geopolitical tensions remained at the forefront with Asian traders worried about relations between the United States and China and European investors expressing concerns over Brexit. Domestic growth data also influenced risk sentiment as well as further weakness in the tech sector.

In the cash market on Tuesday, Japan’s Nikkei 225 Index settled at 23274.13, up 184.18 or +0.80. Hong Kong’s Hang Seng Index finished at 24624.34, up 34.69 or +0.14% and South Korea’s KOSPI Index closed at 2401.91, up 17.69 or +0.74%.

In China, the Shanghai Index settled at 3316.42, up 23.83 or +0.72% and in Australia, the S&P/ASX 200 Index finished at 6007.80.

Asia-Pacific Influences

Investors continued to monitor geopolitical developments after China accused the U.S. of “bullying” as it launched a global data security initiative on Tuesday.

That development came as the U.S. continues to pressure China’s largest tech firms and convince countries around the world to block them. U.S. President Donald Trump also recently entertained the idea of “decoupling” from China, or refusing to do business with the country.

In economic news, Japan’s revised GDP figures for the April-June quarter showed the country’s economy shrinking at an annualized 28.1%, according to second preliminary estimates released by the Cabinet Office. It was worse than preliminary estimates released in mid-August, which had shown the country’s economy shrinking 27.8% on an annualized basis in April-June.

In stock news, shares of Chinese bottled water firm Nongfu Spring surged more than 80% from their issue price in their debut in Hong Kong. The stock later pared some of those gains, but still gained more than 50% by the market close.

European Market Influences

European shares fell on Tuesday as steep declines in the dominant U.S. tech sector continue to weigh on investor sentiment.

In the cash market at 12:52 GMT, the UK’s FTSE 100 Index is trading 5888.16, down 49.24 or -0.83%. Germany’s DAX Index is at 12887.63, down 212.65 or -1.62% and France’s CAC 40 Index is trading 4947.99, down 105.25 or -2.22%.

In economic news, revised data showed that second-quarter Euro Zone GDP contracted by 14.7% year-on-year and 11% from the previous quarter, less than initial estimates but still its sharpest decline on record.

In geopolitical news, back in Europe, the U.K. is planning to ramp up its preparations to leave the European Union without a deal if no free trade accord can be reached this week.

The Financial times reported that Prime Minister Boris Johnson’s government intends to legislate to override aspects of the Withdrawal Agreement it signed in January, with the EU warning Monday that there will be no deal if this course of action is pursued.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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