Bond Yields ebb as tech-tumble fuels retreat in global equity indices



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Bond Yields ebb as tech-tumble fuels retreat in global equity indices

On Friday, almost all major bourses across the globe had witnessed a red sea of Nile with a steep sell-off wave in tech stocks leading the declines, as global equity indices had beaten a hasty retreat with Nasdaq and S&P 500 had experienced their worst weekly plunges since the onset of pandemic outbreak.

In the day’s sweeping sell-off breeze also has been stemmed from an upscaled investors’ caution ahead of January 25-26 US Fed policy meet, which would more likely to offer further evidences on when the US Central Bank has been planning to increase its benchmark borrowing cost.

So far, capital markets across the globe have been betting on a rate-hike as early as by March, however, according to remarks from several US Fed policymakers this week, the US Federal Reserve might just have decided an earlier-than-anticipated rate hike contemplating the extent of a blistering inflation-surge that the US economy has been grappling with.

Since rate-hike is usually seen as a negative impetus for the so-called growth stocks, Nasdaq had borne the heaviest brunt during this week’s havoc-scale retreat. Adding further strain on tech stocks, Netflix has been nudged over a whopping 21 per cent on Friday following reveal of a poor subscription growth, as the post-pandemic global economy appears to have become too agitated to get back into its normal rhythm, wreaking havocs on mega-cap tech stocks which had been benefited by the most during the pandemic-led restrictions.

Global equity indices retreat as tech sell-off accelerates

Citing statistics, in the day’s global equity market wind-down, major European bourses fell more than 2 per cent with Frankfurt’s DAX, French CAC 40 and Italy’s FTSE MIB leading the tally of losses, while regional pan-European STOXX 600 shed 1.84 per cent.

While US Treasury bond yields fell by 7.2 percentage point to 1.76 per cent compared to a two-year peak of 1.90 per cent notched on Wednesday, in the Wall Street, Dow dwindled 1.3 per cent, S&P 500 shed 1.89 per cent and tech-heavy Nasdaq has been hit with a hefty whiplash of 2.72 per cent with S&P 500 and Nasdaq logging their worst weekly percentage decline since March 2020.

Over the week, Nasdaq fell 7.6 per cent, Dow declined 4.6 per cent and S&P 500 dipped 5.7 per cent. MSCI’s gauge of global equity indices took a tattering header of 1.74 per cent