Asian stocks were poised for losses in Wednesday trade after U.S. stocks fell sharply on the back of declines in technology names. That cut short a rally seen in Europe and Asia’s Tuesday session linked to an apparent easing in trade-related tensions.
All three major U.S. indexes closed lower despite notching gains earlier in the session as technology stocks weighed on the broader markets. The drop in large cap tech names saw the Nasdaq composite fall 2.93 percent to close at 7,008.81.
Meanwhile, the Dow Jones industrial average declined 1.43 percent, or 344.89 points, to close at 23,857.71 and re-enter correction territory while the S&P 500 lost 1.7 percent to end at 2,612.62.
Facebook shares lost 4.9 percent after Bank of America Merrill Lynch reduced its price target on the stock for the second time in five days. The drop in Facebook stock came amid a data scandal involving the tech giant and political data firm Cambridge Analytica.
Apart from tech sector troubles, investors also focused on a Bloomberg News report that the Trump administration was considering using an existing emergency law to limit Chinese investment in technologies regarded as sensitive.
The declines in U.S. stocks followed gains in Asia and Europe on Tuesday as investors focused on receding trade tensions. The pan-European Stoxx 600 rose 1.16 percent, with gains seen in all sectors. In Asia, Japan’s Nikkei 225 advanced 2.65 percent to lead gains in the region in the previous session.
On Wednesday, futures pointed to a fall at the open for Japanese equities as Nikkei futures traded in Chicago dropped 2.8 percent to 20,720 compared to the benchmark’s last close.
Down Under, the S&P/ASX 200 edged down 0.27 percent in the early going as all but two of its subindexes traded lower.
Ahead, a fair number of Hong Kong-listed corporates are due to report full-year results on Wednesday, including developer Sunac China, China Telecom and Wynn Macau.
In currencies, the dollar index, which tracks the greenback against a basket of currencies, stood at 89.372 at the end of Tuesday after touching a five-week low in the overnight session.
Against the yen, the dollar was a touch softer at 105.38 at 6:43 a.m. HK/SIN.
On the commodities front, oil prices edged lower overnight. U.S. West Texas Intermediate crude futures slipped 30 cents to settle at $65.25 per barrel and Brent crude futures declined 1 percent to settle at $70.11.
The economic calendar for Wednesday is light on data, although the Bank of Thailand’s monetary policy meeting takes place today.
— CNBC’s Fred Imbert contributed to this report.
