Major indices across Asia witnessed a price recovery on Tuesday (June 13) after mirroring the Wall Street’s dismal performance the previous day.
Tech stocks such as Amazon, Apple, Alphabet and Microsoft were subject to severe price corrections on Monday as fears of overvaluation had arisen. The Nasdaq Composite and S&P 500 ended on a dour note with declines of 0.52% and 0.10% respectively as of Monday night.
“The positive aspect of the strong selling on Friday in tech, which resulted in a monster increase in NASDAQ futures open interest (the fifth largest since 2000), was that it was driven to a large extent by short sellers, but there has also been a strong rotation into other sectors in the market, such as energy and financials”, remarked Chris Weston, Market Analyst at IG Melbourne.
“Looking at price action today in tech, it suggests that the short sellers may not have a huge amount to work with here and that we are not likely to see the 10% decline that many had been talking about on Friday. Buyers are starting to kick back in with the NASDAQ 1.4% off the intra-day lows.”