“FAANGs” Weigh on U.S. Tech Index, Nissan Scandal Sinks Nikkei, RBA Minutes Dovish
Stocks are down in Asia with investors following the tracks laid down by the weaker U.S. markets. This is setting the tone for a lower opening in the U.K. and Europe.
U.S. stocks were drilled lower by another plunge in the technology sector, specifically the popular sub-sub-sector called the “FAANG” stocks. These stocks – Facebook, Amazon, Apple, Netflix and Google’s parent Alphabet are now in bear market territory after declining more than 20 percent from their 52-week highs. The decline in these five stocks represented most of the tech-heavy NASDAQ-Composite , which fell 3-percent, signaling a resumption of its 6-week slide.
Facebook tanked more than 5 percent on more fallout from the Cambridge Analytica scandal and reports that Russia used the platform to disrupt the U.S. election in 2016. Apple shares dropped 4 percent as The Wall Street Journal reported the company has cut production for iPhones announced in 2018.
The percent change from 52-week high to the low on Monday for each of the five “FAANG” stocks are as follows: Facebook ( FB ) is down 39.5%, Amazon ( AMZN ) has declined 25.4%, Apple ( AAPL ) is lower by 20.5%, Netflix ( NFLX ) is off 35.6% and Alphabet ( GOOGL ) has fallen 20.3%.
Japanese Shares Rocked by Scandal
The broader Japanese market was under pressure early Tuesday with the benchmark Nikkei 225 down 1.26 percent. Shares of Japanese automaker Nissan fell 5.51 percent, fueling some of the selling in the big index.
The catalyst weighing on Nissan was the report of the arrest of its chairman, Carlos Ghosn, on allegations of financial misconduct.
Nissan said in a statement on Monday that “over many years” Ghosn and board director Greg Kelly had been under-reporting compensation amounts to the Tokyo Stock Exchange securities report.
The auto giant added that, with regard to Ghosn, “Numerous other significant acts of misconduct have been uncovered, such as personal use of company assets.” The company said Ghosn had also made in appropriate investments.
Aussie Dollar Weakens after RBA Minutes Show No Case for Cash Rate Change
The Australian Dollar is trading lower early Tuesday after minutes from the Reserve Bank of Australia reinforced expectations that the chances of near-term rate hikes are low.
“Taking account of the available information on current economic and financial conditions, as well as the latest forecasts, members assessed that the current stance of monetary policy would continue to support economic growth and allow for further gradual progress to be made in reducing the unemployment rate and returning inflation towards the midpoint of the target,” the RBA said in minutes from its latest monetary policy meeting on November 6.
The RBA also noted that labor market conditions had been stronger than expected but wage inflation remained muted.
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