Global markets are in a correction on Tuesday with major indexes reporting serious downturns during the session. The investors are in anticipation of Fed meeting on the monetary policy, as well as developments on the US-China trade talks and Brexit.
The investors were also influenced by the statement by Director of the Asia and Pacific Department at the IMF, Changyong Rhee, who said the trade conflict between China and the US has already had a visible effect on business confidence and investment in Asia. In his words, some of the countries most affected by the trade war in the region might be Japan and South Korea because of their dependence on exports to China.
“Investments are much weaker than expected. My interpretation of this is that the trusted channel already has an effect on the world economy, especially in Asian economies”, said Changyong Rhee.
According to him, the IMF may shrink its growth forecast in its next review in January, given the slowdown not only in Asia and Europe but also in the United States.
Asian Markets recap
Asian exchanges ended Tuesday trading session on red territory because of investors and analysts concerns about the slowing growth of the global economy.
Japan’s blue-chip index Nikkei 225 fell by 391.43 points, or 1.82%, ending the day at 21,115.45 points. Earlier today, it became clear that the difference between Japan’s actual and potential gross domestic product for the third quarter has gained negative value for the first time in nearly two years. This is a signal that Japan’s central bank’s target of achieving a 2% inflation rate is becoming an even more difficult task due to the weakening of the price pressure.
In South Korea, Kospi declined by 0.43% to 2,062.11 points, and shares of SK Hynix microprocessor manufacturer declined by 1.77%.
Australian index S&P ASX 200 declined by 1.22% to 5,589.50 points. In the domestic financial sector, the major banks ended with a decline of their shares. Australian and New Zealand Banking Group and Commonwealth Bank of Australia declined by 2.95% and 0.95% respectively, while shares of Westpac and National Australia Bank wiped out 1.38% and 1.78% respectively.
On the Chinese markets, the continental index Shanghai Composite dropped by 0.82% to 2,576.65 points, while the Hong Kong’s benchmark Hang Seng dropped by 273.73 points, ending the session at 25,814.25 points.
Today marks the 40th anniversary of the opening of the Chinese economy announced by Deng Xiaoping and the beginning of a series of significant capitalist experiments that saved most of the country from poverty and turned it into a major economic power.
Investors expected the statement of the Chinese President, Xi Jinping, who said that “China’s reforms and opening up to the world are not always easy and can meet unimaginable storms.”
Xi Jinping promised that Beijing will support the state economy while directing the development of the private sector. China will make even more efforts to open its economy to the world and implement major reforms.
European markets mid-session recap
German stocks were on the rise during Tuesday trading in most of the session, but at 04:00 pm GMT the main index DAX 30 is one red, wiping out all the profits from the middle of the session. The index reached the highest level of 10,837.11 points at 03:00 pm GMT, but after that, the moods deteriorated and the DAX 30 fell to 10,763.93 points.
French stocks fell on Tuesday to extend losses from the previous session, as global growth worries persisted and oil prices fell for a third straight session on concerns about oversupply. The main index CAC 40 dropped by 0.75%, or 36.01 points, to 4,763.85 points at 04:00 pm GMT. The stocks of Getlink, which manages and operates the Channel Tunnel between England and France, soared by 5.6% after Eiffage bought a 5% stake in the company.
Britain’s mid-cap index recovered early losses thanks to a small bounceback from retail stocks after an ASOS-led selloff, while the blue-chip index fell as perpetuating concerns over slowing global growth and an oversupply of oil spooked investors. The main index FTSE 100 is on red, with a decrease of 0.95% to 6,708.70 points.
Wall Street early-session recap
The major stock indexes recovered some of Monday’s big losses in today’s stock market with the Dow Jones industrial average moving up about 300 points. Dow stocks Boeing and Johnson & Johnson were early leaders after they announced plans to boost their buyback programs.
The blue-chip index Dow Jones Industrial Average is up by 0.64% at 11:30 AM EST, while the broader S&P 500 is growing by 0.51% and Nasdaq Composite raises by 0.57%
The stocks of Oracle jumped by 3% after its better-than-expected earnings report late Monday. Shares are currently consolidating within a flat base that shows a 52.21 buy point. The base also offers a more aggressive buy point at 51.55. In either case, the stock must first regain its 50-day line. Oracle’s relative strength line is showing strength amid a volatile stock market.