Market Update: Huge Market Sell Off - Dow Jones Ended Weaker

  • Nov 13, 2018 AEDT
  • Team Kalkine
Market Update: Huge Market Sell Off - Dow Jones Ended Weaker

The investors’ confidence is getting hampered because of the downturn in the markets. On November 12, 2018, Dow Jones Industrial Average ended the day in red and settled at 25,387.18 which implies the substantial one-day decline of 602.12 points or 2.32%. Needless to say, the technology stocks are the primary drivers for any sort of movement in the global markets and any downturn in these, could weigh on the broader markets. The primary reason for yesterday’s downturn was a sharp decline in the shares of Amazon (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL). However, other factors which significantly impacted the US markets were strengthening of the dollar as well as elevated geopolitical worries. The stock price of Apple and Amazon witnessed the decline of 5.04% and 4.41%, respectively. The negative momentum was seen in the S&P mainly due to the steep fall in the stock price of Goldman Sachs (NYSE: GS). The stock ended at US$206.05 per share which implies an intraday fall of US$16.60 per share or 7.46%. The primary reason for the decline in the Goldman Sachs was that Malaysia is demanding a multimillion-dollar refund. The downtrend in the share price of Apple was witnessed mainly because Lumentum reduced the sales as well as earnings forecasts on the back of the lower demand.

Oil Prices, Strong US Dollar, Trade Worries Weigh on Investors’ Minds

Apart from the decline in the big technology giants, the drivers for yesterday’s downturn in the US markets were strong US dollar and increased global tensions. The announcement by Saudi Arabia to reduce the exports of the oil had earlier brought some stability in the oil prices which were witnessing a continuous decline. Apart from the grant of waivers to certain countries from the sanctions imposed by the US, the expectations of weaker growth in the oil demand also pulled down the oil prices. The concerns for oil prices come at a time when the market participants are worried about the trade battle between the US and China. The market players would be having the eyes on the meeting between the US and China, and if it ends on a positive note, the global markets would be helped. Other concerns which are weighing on the investors’ behaviour is increased US dollar. A rise in the US dollar would impact the sales figure of the multinational companies because the dollar appreciation would make the goods expensive for the customers which are purchasing abroad.

Downturn in the US technology stocks Impacted Australian Markets

It would not be wrong to say that the big technology stocks in the US has impacted the US markets. The Australian markets also ended on the weaker note with S&P/ASX200 ending the session at 5834.2, which implies the fall of 107.1 points or 1.8%. The negative momentum was also witnessed in the information technology or IT stocks. The Australian markets primarily witnessed the negative impacts from the decline in the technology sector as well as fall in the Westpac Banking Corporation (ASX: WBC) and CSL Limited (ASX: CSL). CSL fell 2.582% while WBC declined 5.407%. Orocobre Limited (ASX: ORE) and Mayne Pharma Group Limited (ASX: MYX) ended the session by advancing 3.54% and 2.752%, respectively.

Ruralco Holdings Limited (ASX: RHL) today reported earnings for FY 2018 and managed to beat the earnings estimates. Read Full Post here. Orocobre Limited conducted the November 2018 investor presentation highlighting the FY 2018 financial results. Read Full Post here. One of the big four banks, National Australia Bank Limited (ASX: NAB) conducted a survey and found out that business conditions and confidence indexes witnessed the negative momentum. Read Full Post here.


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