Asian markets recover from FB breach fuelled unease

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The sharp morning sell-off in Asian markets Tuesday eased later in the day but investors remain on edge ahead of a key Federal Reserve policy meeting.

Regional equities kicked off with sharp losses after a massive data breach at Facebook fuelled fears of a regulatory crackdown on the technology sector, sparking plunges in New York.
Facebook Logo.

The scandal at the social media giant piled further anxiety on to investors already fretting over possible US interest rate hikes and Donald Trump’s protectionist rhetoric, which has sparked talk of a global trade war.

Reports said Cambridge Analytica, the analysis firm hired by Donald Trump’s 2016 presidential campaign, stole data from 50 million Facebook user profiles to help design software to predict and influence voters’ choices.

Stephen Innes, head of Asia-Pacific trading at OANDA, warned: “This security breach could end up being a significant turning point for the social media and network portal.”

Facebook Logo.

The news hammered tech giants with Facebook plunging 6.8 percent, while other household names were also hit-including Apple, Google-parent Alphabet and Netflix-by regulatory concerns.

Pound gains –

“The adults are starting to realise that the altruistic kids who started some of these tech behemoths are either unwilling or unable to deal with the fact that the companies they wrought and thought were a force for good can be manipulated by those who seek to do ill,” said Greg McKenna, chief market strategist at AxiTrader.

The US losses filtered through to Asia in early trade but tech firms in the region bounced back as the day wore on. Hong Kong-listed internet giant Tencent and AAC Technologies moved into positive territory, as did Samsung in Seoul. However, while Sony pared losses in Tokyo it ended lower.

Broader markets were mixed, having all started down. Japan’s Nikkei dipped 0.5 percent and Sydney slipped 0.4 percent. But Hong Kong added 0.2 percent and Shanghai ended up 0.4 percent.

Singapore was 0.2 percent higher and Seoul climbed 0.4 percent. Wellington, Manila, Taipei and Jakarta were all down.

Investors are keeping a close watch on the Fed’s meeting this week, looking for clues about its timetable for tightening monetary policy. Opinion is split on the number of rate hikes it will likely announce this year, with some forecasting three and others saying four.

Market-watchers warn a G20 meeting of finance ministers in Argentina could also revive tensions on international trade after Trump unveiled his controversial tariffs this month.

On currency markets the pound extended gains against the dollar after Britain and European Union leaders agreed a post-Brexit transition deal that will buy businesses and citizens’ time to adjust to life after the divorce.

Key figures around 0710 GMT –

Tokyo – Nikkei 225: DOWN 0.5 percent at 21,380.97 (close)

Hong Kong – Hang Seng: UP 0.2 percent at 31,562.26

Euro/dollar: UP at $1.2347 from $1.2290 at 2100 GMT

Pound/dollar: UP at $1.4047 from $1.3942

Dollar/yen: UP at 106.28 yen from 106.01 yen

Oil – West Texas Intermediate: UP 56 cents at $62.62 per barrel

Oil – Brent North Sea: UP 55 cents at $66.60 per barrel

New York – Dow: DOWN 1.4 percent at 24,610.91 (close)

London – FTSE 100: DOWN 1.7 percent at 7,042.93 (close)

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