Shares in SoftBank dropped again as investor unease mounted over the Japanese conglomerate’s high-risk, multibillion-dollar bet on options tied to US technology stocks.

The group’s stock fell as much as 4.4 per cent in morning trading in Tokyo on Tuesday, taking the shares’ total decline for the week past 10 per cent. Shares later trimmed some of those losses to trade down 1.2 per cent.

More than $10bn has been wiped from the company’s market value since the Financial Times revealed that SoftBank was the mystery “whale” that drove US tech stocks to record highs through aggressive bets on equity derivatives.

“Given SoftBank is back on the radar since its epic decline [during the coronavirus pandemic] in February and March, it is worth asking the question whether SoftBank Group is a black box and poses a systemic risk to the overall system,” said Peter Garnry, head of equity strategy at Saxo Bank.

The drop in SoftBank’s shares contrasted with the broader performance of shares in Tokyo, with Japan’s Topix index rising 0.2 per cent.

Stock markets across other parts of Asia Pacific were mixed, with Australia’s S&P/ASX 200 up 0.8 per cent while China’s CSI 300 of Shanghai- and Shenzhen-listed shares fell 0.5 per cent. Hong Kong’s Hang Seng shed 0.6 per cent.

The losses for Chinese stocks followed comments from US President Donald Trump, who late on Monday floated the idea of “decoupling” the US economy from China, saying the move would save America “billions of dollars”.

Sterling fell 0.2 per cent versus the dollar to $1.3143 and 0.1 per cent against the euro to €1.1131. The UK currency weakened nearly 1 per cent against the greenback on Monday after the Financial Times reported that the UK government was planning legislation that would override important parts of the Brexit withdrawal agreement.

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Futures linked to the S&P 500 index pointed to a gain of 0.3 per cent when US markets reopen on Tuesday after Monday’s closure for the Labor Day holiday. Futures for London’s FTSE 100 were up 0.1 per cent following the index’s 2.3 per cent rise in the previous session.

Oil benchmarks continued to struggle after dropping to their lowest levels in more than a month on Monday following Saudi Aramco’s decision to cut prices on crude shipments to Asia.

West Texas Intermediate, the US marker, fell 1.9 per cent to $39.02 per barrel, while international benchmark Brent crude slipped 0.1 per cent to $41.96 per barrel.

Via Financial Times