Asian Stocks Fall as the Real Estate Market in China Wanes

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Asian Stocks Fall as the Real Estate Market in China Wanes
Asian Stocks Fall as the Real Estate Market in China Wanes

Asian Stocks Fall as the Real Estate Market in China Wanes

Continuing the trend of the last trading day of the last week, Asian stocks dropped today which according to market observers is an impact of plunging property stocks that took a toll on China and investors continued to fret about the impact of the US Federal Reserve’s stimulus withdrawal. China shares sank to a two-week low and led to decline in Hong Kong markets.

Investors looked worried as shares of the property and banking counters slipped on mainland news reports that stoked fears banks have stopped extending loans to property-related companies. Shares of the affected real estate companies slid the most and MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.6%.

A similar trend was seen in Japan’s Nikkei stock which received an average decline of 0.2%. Nikkei closed down 0.2% at 14,837.68, after surging 2.9% on Friday. Earlier, in today’s trading, the Nikkei advanced as much as 0.8% to 14,982.53 which was the highest level since January 31; however, it could not hold the pace and fell as much as 1.4% to 14,658.14 during the course of trade.

On the other hand, according to a data released today the pace of the rise in China’s home prices slowed in January for the first time in 14 months. The news alarmed investors who were waiting for better data. Also, it looks the government’s efforts to cool the market were not having an effect. Not just real estate prices but the Chinese Yuan fell today.

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Chinese Yuan extended its worst weekly performance in more than two years after the People’s Bank of China set its daily midpoint lower for a fifth session. On the other hand, European shares were seen opening lower today as financial spreadbetters expecting Britain’s FTSE 100 to open down as much as 0.5%. Downward movement was seen in Germany’s DAX which opened 0.4% lower.

A similar trend was seen in France’s CAC 40 which took off 0.3%. According to market observers lower sentiments in Asian markets will definitely have some impact on the European trade today. Traders may though expect better trade today on Wall Street; however, the Friday’s trading where stocks were off slightly on options-related expirations, may not give them a lot of hope.

The commodities market looked positive though as US crude rose about 0.3% to $102.47 a barrel after posting a sixth straight week of gains. A similar trend was seen in Brent crude added about 0.2% to $110.06 a barrel.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com