Investors this week deserted a trade that has generated big returns since the financial crisis, ditching shares of fast-growing technology companies in favour of staid businesses that had largely been overlooked by Wall Street.
The tech-focused Nasdaq Composite shed 4.5 per cent in the first five trading days of 2022, the worst annual debut since fears of a slowdown in China sent shockwaves across global financial markets six years ago.
The tech tumble came as US government bond yields surged the most in 28 months, as concerns mounted that the Federal Reserve would need to raise rates more aggressively than was previously expected to tame hot inflation.
“A lot of the air has been let out,” said Jurrien Timmer, head of global macro strategy at Fidelity Investments. “[Speculative tech shares] went to the moon and now that liquidity tide is reversing.”
Tech stocks, particularly those of fast-growing and lossmaking…
