Asian stock markets generally declined on Wednesday after Wall Street’s tumble overnight. Stepping into the European trading session, stocks are expected to open lower, as investors are worried the overvaluation of those tech stocks. The Nasdaq has dropped 10% over the last three trading days, which is a sign of entering into a correction.
“Cash is King” once again reflected the recent strength of the dollar. Dollar index has bounced around 2% from 91.75. Investors sold riskier assets in a such bearish condition, turning back to hold dollar, driven by risk aversion demand. The fears of “hard”Brexit pushed the Sterling to 1.29 level, dropping around 200 pips against dollar on Tuesday.
ZFX analyst Jacob Leung said that, the sell-off of tech stocks may just begin, and may further trigger market panic in coming weeks, especially if no good news arise. However, we can see market sentiment can change so fast.
On the other hand, oil prices dropped sharply. The market was panic after Saudi Arabia lowered its oil export prices, together with the fears of “hard” Brexit, and the escalating tensions between China and the US.
As the dollar strengthened, gold price once fell to a low that near $1900 despite risk aversion. However, the continuing sell-off pressure in the stock market spooked investors to seek safe-haven, gold price found support and eventually bounced back to $1930 level.
ZFX analyst Jacob Leung said that the moves imply the adjustment, with a high volatility, may continue in these days.