U.S. markets saw California tech giant Cupertino losing while Amazon.com and Chinese technology companies Pinduoduo Inc, Baidu, Tencent Holdings rising along with Microsoft Corp, Meta Platforms Inc, Nvidia Corp and Tesla Inc. Airline, gold and energy stocks also saw significant weakness. The FTSE Bursa Malaysia KLCI (FBM KLCI) slipped to its intraday low of 1,481.38 on Friday with Axiata Group Bhd and Maxis Bhd dragging the composite index down along with Top Glove Corp Bhd, Malayan Banking Bhd, CIMB Group Holdings Bhd, Tenaga Nasional Bhd (TNB).
Stocks moved sharply lower over the course of the trading session on Monday, largely offsetting the strong upward move seen last week. With the steep drop on the day, the Dow pulled back well-off last Friday’s seven-month closing high.
The major averages climbed off their worst levels going into the close but remained firmly negative. The Dow tumbled 497.57 points or 1.5 percent to 33,849.46, the Nasdaq plunged 176.86 points or 1.6 percent to 11,049.50 and the S&P 500 dove 62.18 points or 1.5 percent to 3,963.94.
Concerns about the latest developments in China contributed to the substantial pullback on Wall Street, as widespread protests against the Beijing’s zero-Covid policy broke out over the weekend.
A recent surge in new Covid cases in China has led officials to impose new restrictions in several major cities, dashing hopes the world’s second-largest economy was on the way toward easing curbs.
Craig Erlam, senior market analyst at OANDA, said the protests “highlight how increasingly frustrated the public is becoming with the leadership’s zero-Covid policy.”
“Record cases across multiple cities are putting the policy to the test and the unrest highlights the enormity of the challenge facing President Xi Jinping and his commitment to zero-Covid,” Erlam said.
He added, “The combination of these creates huge uncertainty, both in terms of how the protests are handled and what the whole experience means for the future of the policy and the economy.”
The weakness on Wall Street may also have reflected lingering uncertainty about the outlook for interest rates ahead of next month’s Federal Reserve meeting.
While the Fed is widely expected to slow the pace of interest rate hikes next month, the minutes of the central bank’s early November meeting suggested some officials think rates will be to be raised higher than previously anticipated.
Traders were also looking to the release of some key economic data in the coming days, including the Labour Department’s closely watched monthly jobs report on Friday.
