Daily Management Review

Asian stocks lost nearly $ 5 trillion of their value this year and continue to decline


10/25/2018


Asian stocks fell on Thursday after falling at Wall Street. Asian stocks have already lost more than $ 4.9 trillion of their value this year, Bloomberg writes.



DocChewbacca
DocChewbacca
The MSCI Asia Pacific Index fell by 2% to 4:30 pm in Hong Kong, increasing the decline from the January peak to 22%.

The Japanese Topix index fell 3.1% to a minimum since September 2017. The Nikkei 225 fell 3.72%. The Japanese yen strengthened against the backdrop of increased investor demand for defensive assets.

South Korean KOSPI fell by 1.63%, after data showed that the country's economy grew in Q3 less than expected. South Korea’s GDP in July-September increased by 0.6% compared with the previous quarter, while an increase of 0.8% was expected.

Hong Kong's Hang Seng Index lost 1.01% on the basis of trading on Thursday.

The Chinese Shanghai Composite added 0.02% to the close of trading, remaining near its low since November 2014. Chinese stocks have been falling for most of the week.

The Australian S&P/ASX 200 index on Thursday fell by 2.83%.

Volatility has returned to the markets, and investors are preparing to strengthen it. The MSCI Asia Pacific Index changed on average by 0.9% during the day from early October to Wednesday. These are the maximum fluctuations since June 2016.

Pressure on Asian stocks is exerted by a trade war between the United States and China, concerns about a slowdown in economic growth and profits, a fall in stocks of technology companies and a rise in interest rates amid tightening of the monetary policy of the US Federal Reserve. But this week, the main source of concern for investors was the strengthening of the dollar, which reached a new high on Wednesday.

The strengthening of the dollar led to a massive outflow of foreign capital from Asian equity funds and forced local central banks to raise interest rates to protect their falling currencies. This in turn increased the pressure on local stock markets.

Having fallen by 11% since the beginning of October, MSCI Asia Pacific is preparing to demonstrate the maximum monthly decline since the times of the global financial crisis. If the weakness of the technology sector persists, which accounts for one-fifth of the region's stock index, investors may have to prepare for more turbulence in the future.

source: bloomberg.com






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