Financial markets across the Asia-Pacific region witnessed a cautious downturn on Tuesday, mirroring a sell-off in heavyweight technology stocks on Wall Street. The session was also marked by a significant cooling in the extraordinary rally for precious metals, with silver and gold attempting to steady after a sharp overnight retreat.
Precious Metals Rally Hits a Speed Bump
The most dramatic move came from the silver market, which experienced its steepest single-day plunge since August 2020, tumbling 8.7% overnight. This sharp decline unwound part of a parabolic rise that had captivated investors. On Tuesday, the metal showed signs of recovery, rebounding 1.7% to $73.46 per ounce. This recovery comes after it touched a peak of $83.62 just a day earlier. Despite the recent volatility, silver remains a standout performer, up approximately 150% for the year.
The reversal spilled over into other precious metals. Gold slid 4.4% overnight before finding its footing and rising 0.6% to $4,356 an ounce. The pullback in these safe-haven assets introduced a note of caution into trading sentiment.
Regional Shares Track Global Weakness
Equity markets in Asia broadly reflected the negative lead from the United States. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1%. However, the broader picture for the region remains robust, with the index still on track for a strong annual gain of 26.7%, which would be its best performance since 2017.
Japan’s benchmark Nikkei index fell 0.2%, though it is also up around 26% for the year. In Greater China, markets showed particular softness. Taiwanese stocks declined 0.7%, while China’s blue-chip CSI 300 index dropped 0.3%. This movement followed Beijing's announcement of live-firing military exercises around Taiwan, adding a geopolitical dimension to the market's concerns.
Wall Street Tech Slump Sets the Tone
The primary catalyst for the Asian session's weakness originated on Wall Street. U.S. markets closed lower as major technology stocks retreated from gains made in the previous week. The S&P 500 index slipped 0.3%, dragged down by declines in giants like Tesla, Nvidia, and Meta Platforms. The tech-heavy Nasdaq 100 fell 0.5%. Equity futures in Australia and Japan pointed to a soft open, confirming the bearish spillover effect.
In other asset classes, oil prices eased slightly after jumping more than 2% on Monday. Brent crude futures slipped 0.5% to $61.63 a barrel. The previous session's surge was linked to escalating Russia-Ukraine tensions after Moscow accused Kyiv of targeting President Vladimir Putin's residence. The subsequent pullback was partly attributed to the broader weakness in commodity markets, led by precious metals.
Meanwhile, in the cryptocurrency space, Bitcoin appeared to be stabilizing just below the $90,000 mark after a turbulent period. This represents a significant drop from its peak above $126,000 in October, highlighting the volatile year for digital assets.
The simultaneous cooling in tech equities and precious metals suggests a period of consolidation and profit-taking is underway as the year progresses. Investors are reassessing positions after remarkable rallies, with geopolitical tensions and monetary policy expectations continuing to influence global capital flows.
