Japan's Tokyo stock market fell sharply in early trading on the 5th, and the Nikkei 225 index fell 3%, as inflation fears triggered a sell-off in global technology stocks. The Nikkei 225 index is down 10% from its peak on September 14.
The South Korean stock market also performed poorly today, with the Kospi index falling 1.5%, down 10% from a record high set in July, towards a technical pullback. The healthcare sector suffered the biggest decline, with Celltrion and Samsung Biologics falling more than 5 per cent.
U. S. stocks fell on Monday, with technology stocks tumbling again under the threat of persistently high inflation. The S & P 500 fell 1.3% to below its 100-day moving average; NasdaqThe 100 index fell 2.2% to Dow JonesThe industrial index fell 0.9%.
High-growth technology stocks led the decline, including technology Amazon.Com Inc、 Facebook IncShares of Inc., vaccine makers also fell on Merck's announcement of an effective Covid-19 drug; energy stocks followed the rise in oil prices.
"We are facing an energy crisis, supply chain problems, rising inflation, signs of slowing economic growth and a lot of discussion about stagflation," Deutsche Bank strategist Jim Reid said in a report.
As investor anxiety heats up, global markets are turning to risk aversion, while investors are preparing for the Fed to start tapering its stimulus as early as next month. Qualcomm IncInflation and rising Treasury yields have made high-growth stocks less attractive to investors; other tech companies may also face higher risks to their profits.
"Technology stocks are most likely to be hit hardest because higher interest rates mean a higher discount rate for future earnings," said Brian Price, head of investment management at Commonwealth Financial Network. "as long as inflation expectations remain high, I expect this trend to continue."