hueseo
Joined: 06 Jul 2011
Posts: 423
|
 Posted: Fri Aug 19, 2011 2:26 am Post subject: Asian stocks dip as global economic growth fears return |
 |
|
Asian stocks fell on Friday as fears about a global economic slowdown were fanned by weak US data.
Japan's main Nikkei 225 stock index slid 2%, South Korea's Kospi saw losses of 5.7%, and Australia's ASX index was down 3.3%.
The falls follow steep losses in the US and Europe on Thursday, and herald a week of market declines.
Investors are worried global growth is slowing more than first thought, with key markets set for a recession.
These fears have been building over recent weeks and financial markets have been seeing extreme volatility.
Many analysts are questioning if a bear market - one in which the long term trend is negative - has now developed and is here to stay.
"Bear markets tend to happen when sentiments are low and that comes from weakened demand and bad news flow," Chou Chong of Aberdeen Asset Management told the BBC.
"The Western regions are having to face a period of lower growth and dampened demand. That is putting pressure on market sentiment." he added.
A number of industry heavyweights such as computer firm Dell have cut their earnings outlooks in recent days. At the same time, investment banks including Morgan Stanley have been revisiting their growth forecasts for this year.
Continue reading the main story
“
Start Quote
We are shifting from a policy risk concern to a realisation that the economies are not as strong as we believed ”
Frederic Neumann
HSBC
Trigger points
On Thursday, Morgan Stanley said that the US and Europe were "dangerously close to recession", despite efforts by policymakers to boost growth and calm markets.
"Investors fear that policymakers no longer have the tools to avoid a recession," Frederic Neumann at HSBC in Hong Kong told the BBC's Asia Business Report.
What sparked the sell-off in stocks was Thursday's release of data on the US economy.
Manufacturing activity in the US's mid-Atlantic region slumped to its lowest level since March 2009. Data from the Philadelphia Federal Reserve Bank is seen as an early indicator of manufacturing nationally.
At the same time, sales in the US housing market fell unexpectedly and unemployment claims rose sharply.
The numbers weighed on sentiment in both the US and Europe.
"The issue now is there is building evidence that the economies themselves are weakening," Mr Neuman said.
Fears about a slowdown in global growth have driven up demand for traditional safe havens
"We are shifting from a policy risk concern to a realisation that the economies are not as strong as we believed and that is something that the investors have only begun to wake up to right now."
Mr Chong of Aberdeen Asset Management warned that given the uncertainty surrounding the health of the developed economies, markets are likely to remain volatile.
"Until we do see the US and Europe find a long term sustainable solution to their growth and debt problems, markets will react to any near-tem noises," he explained.
The Dow Jones index closed down 3.7% while European indexes lost between 4% and 6%.
Safe havens?
On Friday, oil prices continued to drop as investors bet that slower global growth would dent demand for crude.
"Investors have been spooked," said Yumi Nishimura of Daiwa Securities, adding that markets would be looking for more clues as to the state of the global economy.
"They are now focusing on next week's data such as US gross domestic product," she said.
Amid the worries about the state of the global economy, so-called safe haven investments continued to rise in Asian trade, extending Thursday's sharp increases.
The spot price of gold hit a new record high of $1,833.81 an ounce.
The Swiss franc rose against the euro, despite recent attempts by the Swiss authorities to weaken it earlier this month.
Source : Hue Da Nang | Da Nang Hoi An | Hoi An Hue | Du Lich Hue | Du Lich Hoi An | Du Lich Da Nang | Du Lich Sapa | Du Lich Da Lat | Du Lich Phu Quoc | Du Lich Lao | Du Lich Cambodia | Du Lich Thai Lan | Du Lich Singapore | Du Lich Malaysia | Du Lich Trung Quoc
Post by netvlz42021 |
|
