Asia stocks hover at 4-year lows on China worries; oil slides
HONG KONG (Reuters) — Asian stocks held near four-year lows and crude oil prices approached a 20 percent drop in less than two weeks, as investors remained wary of China’s volatile financial markets.
European markets are set to open flat to slightly higher, with Britain’s FTSE 100 to open 0.5 percent up, Germany’s DAX to gain 0.8 percent, and France’s CAC 40 to rise 0.7 percent, according to IG.
MSCI’s broadest index of Asia-Pacific shares outside Japan gave up early gains to trade 0.2 percent lower, just shy of its lowest level in four years. It is down more than 8 percent since the start of 2016. It fell 12 percent last year.
“Investors are still concerned about the extent of China’s slowdown and while we may be in the middle of a consolidation phase, we have yet to see any data indicating a turnaround which is feeding the overall uncertainty,” said Ben Pedley, head of investment strategy for Asia at HSBC Private Bank in Hong Kong.
With investors still licking their wounds from last year’s plunge in global commodity prices and a sharp sell-off in Chinese markets, 2016 has brought about more pain for investment portfolios in the form of a deepening slowdown in the global economy and volatile Chinese markets.
Japan’s Nikkei fell 2.7 percent after a market holiday on Monday, closing at its lowest in nearly a year, while U.S. stock mini futures were in the red pointing to a weak start.
Beijing set another firm fix for its currency and stepped up a verbal campaign, backed by what dealers said was aggressive intervention by state-owned banks to steady markets.
According to MSCI global indexes, BRIC and other emerging market indexes have bled the most so far this year; the BRIC index has lost 7.2 percent and emerging markets, 6.8 percent. MSCI’s broadest gauge of world stocks fell to its lowest since September 2013.
On Wall Street, the S&P 500 managed to stabilise on Monday after three straight days of one-percent-plus declines, ending the day up 0.1 percent.
“It is a good sign that U.S. shares bought back in late trading to end in positive territory … Maybe they were helped by the view that the Fed may not be able to raise rates when markets were gripped by fear over China and falling oil prices,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
Read full article: Business Standard
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