During the four sessions through Tuesday, these sales reached the highest level in dollar terms in more than 10 years, data compiled by Goldman Sachs Group Inc.\u2019s prime broker show.<\/p>\n
The tech carnage worsened after minutes of the Federal Reserve\u2019s last policy meeting pointed to earlier and\u00a0faster<\/a><\/strong>\u00a0rate hikes, uncovering \u201ca more hawkish Fed than some may have expected,\u201d said Mike Loewengart, managing director of investment strategy at E*Trade Financial.<\/p>\n The Nasdaq 100 Index dropped more than 3%, rounding out its worst two-day drop since March.<\/p>\n Stocks boasting nose-bleed valuations bore the brunt of selling, with a Goldman basket of expensive software sinking 6.3% to the lowest level since last May.<\/p>\n The MSCI Asia Pacific Communication Services Index dropped as much as 1.5% on Thursday, with South Korea\u2019s Kakao Games Corp. the biggest loser with a 13% slump.<\/p>\n Hong Kong\u2019s Hang Seng Tech Index, which mainly tracked Chinese giants, was down 0.6% at the mid-day break. The gauge plunged 4.6% on Wednesday and is near oversold levels.<\/p>\n \u201cThe Fed is going to be raising rates this year, perhaps more aggressively than many thought,\u201d said Mark Freeman, chief investment officer at Socorro Asset Management LP.<\/p>\n \u201cIn many of these tech names, there is little support from the long-only community so it doesn\u2019t take much selling pressure to push the names sharply lower, which in turn forces more selling by the hedge funds.\u201d<\/p>\n The specter of higher borrowing costs prompted traders to rethink their long-held affection for tech firms.<\/p>\n The rush for the exits created trouble for hedge funds whose concentrated bets on speculative software were still elevated even after\u00a0unwinding<\/a><\/strong>\u00a0some of those positions late last year.<\/p>\n On Tuesday, Goldman\u2019s long-short fund clients suffered their worst alpha drawdown, or below-market returns, in a year.<\/p>\n Even before the Fed minutes were released, the tech drubbing began as a\u00a0rotation<\/a>,<\/strong> with big investors selling one-time highfliers to buy companies poised to benefit from an improving economy.<\/p>\n Before Wednesday, Goldman\u2019s hedge-fund clients snapped up airlines, energy and industrial shares during the previous four sessions. As a result, their technology exposure relative to the S&P 500 dropped to the lowest ever recorded by the bank.<\/p>\n With the Fed turning more hawkish and Treasury yields rising, overly stretched stocks may have a hard time to justify their valuations.<\/p>\n According to data compiled by Bernstein, about one-third of all tech stocks were recently traded at more than 10 times their revenues. The S&P 500 was valued at 3.2 times sales, Bloomberg data show.<\/p>\n \u201cWhen there\u2019s no valuation support for a full third of the sector, these unwinds are ultimately a function of positioning and pain,\u201d said Benjamin Dunn, president at Alpha Theory Advisors LLC.<\/p>\n The hammering in technology stocks that began to spread into the broader market Wednesday is being fueled by one of the most intense bouts of selling by professional speculators since the financial crisis.\u00a0<\/p>\n","protected":false},"author":341034,"featured_media":429118,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19],"tags":[54499,39322,47392],"class_list":["post-429108","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-nasdaq-100","tag-tech-companies","tag-tech-shares"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/429108"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=429108"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/429108\/revisions"}],"predecessor-version":[{"id":429120,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/429108\/revisions\/429120"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/429118"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=429108"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=429108"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=429108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2022\/01\/Tech-stocks-carnage_January-2022_Bloomberg.jpg\")
<\/a><\/p>\n
\nNow read: Elon Musk\u2019s wealth versus South Africa\u2019s top tech companies<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"