As investors fear about the global slowdown, Asian stock markets were pummeled today. China is facing huge trouble as possibly it is going to face slow growth as its manufacturing sector is not faring well. On the other hand, the Japanese yen has strengthened which is affecting the exports of the country.
Earlier ForexMinute reported that Christine Lagarde, the head of IMF said that it is high time for policymakers around the world to pay attention to the potential repercussions from the Fed’s tapering. Now that it looks like the stimulus tapering on the part of the U.S. Federal Reserve is having an impact on the global economy, her skepticism looks genuine.
Christine Lagarde has also said that there’s 15 to 20 percent chance that the Eurozone may suffer deflation. The impact of all these fears is looming large on the Asian stock market wherein most of the regional stocks fell. Japan’s Nikkei 225 sank 2.3 percent to 15,023.08 as the dollar edged higher to 102.42 yen from 102.38 late in Friday’s trading.
Following the trend in the regional market, Hong Kong’s Hang Seng lost 2 percent to 21,987.65. A similar trend was seen in Seoul’s Kospi which fell 1.3 percent to 1,915.27. Other indexes in the region including mainland China’s Shanghai Composite Index dropped 0.7 percent to 2,031.24.
Regional Stock Market in Asia on Losing Streak
On the other hand, benchmarks in Taiwan, Singapore, Philippines, Indonesia and New Zealand also slipped to some extent and set a gloomy mood among investors. A similar trend was seen in the S&P BSE Sensex in India which slipped over 340 points in trade on Monday and is now trading below its crucial psychological support level of 21000.
According to market observers, the slower performance in the Indian stock market is that investors are worried about disappointing manufacturing data from China that came last week and concerns of pull-back of the stimulus package in the U.S. India’s national currency fell for a third day today. The measure on the part of the U.S. Fed will affect the emerging markets the most.
Major losers in Indian stock trade today were Ranbaxy, Jaiprakash Associates, DLF, IndusInd Bank, and Tata Motors. A slight gain was seen for shares from Sun Pharma, HCL Technologies, and UltraTech. The stock market did not seem to be attractive for foreign institutional investors who sold shares worth Rs 230.6 crore.