Hong Kong | Asian markets plunged Thursday morning following the worst session on Wall Street for months, as US President Donald Trump said the Federal Reserve had “gone crazy” with plans for higher interest rates.
The benchmark Nikkei 225, the Hang Seng in Hong Kong and the Shanghai Composite all plummeted more than three percent in early morning trade, as investors fretted about surging interest rates and an ongoing trade war.
“All bets are off,” warned Stephen Innes, head of trading at OANDA, adding that the markets “are fraught with peril.” “The US equity bloodbath is taking no prisoners in Asia as a sea of red greets investors at the open, as equity deleveraging and liquidation intensifies,” he said. Taiwan plunged nearly six percent, with Seoul down three percent and Sydney and Singapore both falling two percent.
The steep drop in Asia followed a decline on Wall Street of nearly 830 points, the biggest fall since February, amid Trump’s latest criticism of the Federal Reserve, the US central bank. The rout in US shares followed substantial losses on European bourses, due in part to tensions between Brussels and Rome over Italian budget plans that have revived fears about the eurozone. Bourses in Paris and Frankfurt both lost more than two percent, while London fell 1.3 percent.
“The selling is not panicking but it’s persistent,” Briefing.com analyst Patrick O’Hare said of the proceedings. “It’s all about investors rethinking their exposure to stocks.” Many of the biggest US names fell hard in Wednesday’s session, with Apple, Boeing and Facebook all slumping more than four per cent and Amazon, Nike and Microsoft shedding more than five percent.
Stocks have been under pressure since the yield on 10-year US Treasury bonds jumped above three percent last week, a sudden move that raised fears of an overheating economy, speeding inflation and more aggressive Federal Reserve interest rate increases.
Last week’s jump in yields followed strong US data but many analysts have been anticipating a change in the dynamics in the bond market due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes. “It’s shifting the tectonic plates,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors.
The turmoil on stock markets came a day after the International Monetary Fund slashed its global growth forecast on worries about trade wars and weakness in emerging markets.
In other markets, oil prices fell sharply on worries that Hurricane Michael, which is battering the US state of Florida, will dent demand for gasoline and other petroleum products.
Rupee softens 9 paise against US dollar in early trade
Mumbai | The rupee weakened by 9 paise to 73.92 against the US dollar in early trade on Tuesday on increased demand for the American currency from banks and importers.
At the Interbank Foreign Exchange, the domestic currency opened higher at 73.79 but lost ground and fell to 73.92. Dealers attributed the rupee’s fall to the dollar’s strength against some other currencies overseas but fresh inflows by foreign funds and a higher opening in domestic equity markets capped the losses.
Moreover, weak exports data also dampened sentiments in the forex market. India’s exports entered the negative zone after five months, contracting 2.15 percent in September to USD 27.95 billion, according to commerce ministry data.
The rupee had lost 26 paise to close at 73.83 Monday after crude prices rose amid intensifying geopolitical tensions. The benchmark BSE Sensex Tuesday rose by 89.17 points, or 0.26 percent to trade at 34,954.27.
Meanwhile, foreign portfolio investors bought shares worth Rs 67.86 crore on net basis from stock markets on Monday, according to the BSE data.
Rupee falls 36 paise to 73.93 against dollar in early trade
Mumbai | The rupee dropped 36 paise to 73.93 against the US currency in early trade on Monday, breaking its three-day recovery trend, as crude prices rose amid weak macroeconomic data.
A spurt in dollar demand from importers amid sustained foreign fund outflows also weighed on the rupee. Dealers said, factors like the dollar’s strength against some other currencies overseas and a volatile opening of the equity markets also impacted the domestic currency.
Industrial production slipped to a three-month low of 4.3 per cent in August and retail inflation rose marginally to 3.77 per cent in September, according to the data released by Central Statistics Office Friday. Friday, the rupee had ended 55 paise higher at 73.57 against the dollar, as global crude prices eased and domestic indices staged a smart rebound.
Foreign institutional investors (FIIs) sold shares to the tune of Rs 1,322 crore Friday, provisional data showed. The benchmark BSE Sensex fell by 70.85 points, or 0.20 per cent, to 34,662.73 in early trade after crossing the key 35,000-mark to hit a high of 35,008.65 at the outset.
Sensex slips 71 points on negative economic data, weak rupee
Mumbai | The BSE benchmark Sensex after reclaiming the 35,000-mark fell 71 points to quote at 34,662.73 Monday, as the IIP slipped to a three-month low in August and retail inflation rose marginally in September. Besides, weak Asian cues on worries over China-Us trade dispute influenced sentiment.
The 30-share barometer pushed lower by 70.85 points, or 0.20 per cent, to 34,662.73. It opened higher and touched a high of 35,008.65. The gauge had climbed 732.43 points in the previous session on Friday.
Sectoral indices were negative across the board, with oil&gas, auto, consumer durables, PSU, bankex, capital goods, metal, infrastructure and realty falling by up to 1.25 per cent. The NSE index Nifty was trading lower by 21.85 points, or 0.21 per cent, at 10,450.65 after shuttling between 10,524.60 and 10,432.
Selling activity emerged after data released by Central Statistics Office (CSO) on Friday showed that industrial production slipped to a three-month low of 4.3 per cent in August, while retail inflation up marginally to 3.77 per cent in September. Meanwhile, the rupee depreciated by 36 paise paise to 73.93 against the dollar in early trade after Brent crude again went past the USD 81 a barrel, which also dampened sentiments.
Hindustan Unilever, emerged top loser in the Sensex pack, falling 3.28 per cent, followed by ICICI Bank at 2.46 per cent.
Other big losers that dragged both the key indices were Maruti Suzuki, Axis Bank, L&T, Bharti Airtel, Bajaj Auto, PowerGrid, Kotak Bank, Coal India, Adani Ports, Asian Paint, HDFC Ltd, SBI, Vedanta Ltd and Tata Steel. However, stocks of Sun Pharma, ITC LGd, TCS, Infosys, RIL and Wipro were trading higher.
Foreign portfolio investors (FPIs) gave up shares worth a net of Rs 1,322 crore, while Domestic institutional investors (DIIs) remained net buyers, picking up shares worth a net of Rs 1,287 crore on Friday, provisional data showed.Most other Asian markets too were down on trade war worries and surging crude prices following rising diplomatic tensions between Riyadh and the West.
Japan’s Nikkei fell 1.39 per cent, Hong Kong’s Hang Seng shed 1.30 per cent, Taiwan was down 1.10 per cent in their early deals. Shanghai Composite Index, however, was flat. The US Dow Jones Industrial Average had closed 1.15 per cent higher on Friday.
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