Asian markets faltered after China kicked off its annual legislative session by setting a 2024 growth target of 5%
Asian shares mostly dropped on Wednesday after global markets dropped as traders locked in profits after recent tech-driven rallies.
Gold prices and bitcoin reached all-time highs Tuesday before reversing gains, while the sell-off in some technology stocks hit many markets around the world.
Wall Street’s three main indexes dropped, with the tech-heavy Nasdaq closing the day 1.7% down, pulled down by Apple and Tesla.
Apple’s shares dropped after news that iPhone sales in China were lower early this year, serving as “a stark reminder of the ongoing trade tensions between the United States and China”, Stephen Innes of SPI Asset Management said in a note.
While US stock indices are up sharply on the year, the recent rallies have relied heavily on a few mega-cap stocks.
Negative news about these key players can trigger a wider pullback across the entire index spectrum, even more so if sales concerns emanate from China, which makes up a hefty portion of these tech behemoth earnings from a geographical perspective, Innes added.
If former US president Donald Trump is re-elected and were to impose significant tariffs on Chinese imports, trade tensions could escalate, he added. US tech investors could pay the price.
On Tuesday, Asian markets faltered after China kicked off its annual legislative session by setting a 2024 growth target of 5%.
The figure is in line with last year’s goal but well off the double-digit expansion that for years drove the world’s second-biggest economy.
Traders were underwhelmed and global equities wavered.
Premier Li Qiang’s opening speech to the National People’s Congress yesterday indicates China is staying the course, in terms of refraining from a big stimulus, economists Duncan Wrigley and Kelvin Lam of Pantheon Macroeconomics said in a note.
Experts have called for deeper interventions to aid China’s flagging economy, which is beset by a prolonged property sector crisis, record youth unemployment, and a global slowdown that is hammering demand for Chinese exports.
