European Shares Fall, Asian Market Follows the Trend

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European Shares Fall, Asian Market Follows the Trend
European Shares Fall, Asian Market Follows the Trend

European Shares Fall, Asian Market Follows the Trend

As the indications are coming from the Federal Reserve’s last meeting that the U.S. may reduce stimulus in the coming months, European stocks fell to significant levels. The impact is also due to reports that Chinese manufacturing dropped more than forecast. Following the trend in U.S. stock-index futures yesterday and Asian shares also dropped today.

Major Indexes in Europe

All indexes fell to a great extent on the second consecutive days. Whereas the Stoxx Europe 600 Index retreated 0.6 percent and closed at 320.87 at 8:10 a.m. in London, Standard & Poor’s 500 Index futures expiring next month slipped 0.2 percent. Similarly, the MSCI Asia Pacific Index lost 0.6 percent.

Downbeat Asian Market

Manufacturing data going down in China has a great impact on the overall stock market of the region. Today, most Asian stock markets are weaker while emerging market currencies faltered as the dollar charged ahead after the U.S. Federal Reserve’s latest indication that it will taper stimulus to an extent.

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Whereas MSCI’s broadest index of Asia-Pacific shares outside Japan shed about 1.2 percent, Japan’s Nikkei stock average .N225 bucked the region as it surged 1.9 percent amidst the weakening yen. A major blow for the Asian stock market is that the manufacturing powerhouse China is slowing down and its exports are shrinking.

To remain competitive, the Bank of Japan maintained its ultra-loose monetary policy at the end of its two-day meeting on Thursday. It is helping the country remain unaffected from the lows and ups in the Asian market; in fact, it has been the only economy that has consistently performed better in Asian market.

On gloomy trading day today Hong Kong’s Hang Seng Index lost 0.5 percent. Following the trend the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong also declined to an extent and recorded a fall of 0.9 percent. Nonetheless, China’s Shanghai Composite Index saw insignificant changes.

Whereas South Korea’s Kospi index lost 1.2 percent today, Australia’s S&P/ASX 200 Index also saw a decline and fell 0.4 percent. The trend was followed by New Zealand and Singapore stocks markets too as whereas New Zealand’s NZX 50 Index declined 0.5 percent, Singapore’s Straits Times Index fell 0.4 percent.

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