Asian stocks ended the week on a retreat, pushing the regional index towards three-week lows. At the same time, emerging market currencies and commodities also fell, as a renewed sell-off in US tech stocks showed weakening demand for risky assets. Nickel extended the longest rally since 2010.
The MSCI Asia Pacific index was down 1% as of 9:54am in Tokyo, experiencing its worst slide since March 20th. Fast Retailing led the 2,6% drop in Japan's Nikkei 225 Stock Average which is set to suffer the worst weekly loss among developed markets. The yen maintained its lead over other currencies, from the Australian dollar to the Malaysian currency. The Turkish lira depreciated after Moody's cut Ankara's credit outlook.
The biggest winners in the US bull market had a bad day in New York, with the Nasdaq Composite in big decline during the earnings season. China is expected to report higher inflation today and lower producer prices after suffering an unexpected drop in exports yesterday, as it reignited doubts over the growth prospects of the world's second largest economy. India, on the other hand, reported stronger-than-expected industrial production growth in February.
"A heightened risk aversion is emerging from the markets," explains Matthew Sherwood, head of investment markets research at Perpetual in Sydney. “There is no clear reason for these massive sales. The key for investors is to determine which stocks are openly overvalued."
MSCI Asia Pacific ended the week down 1%, while Japan's Topix fell 7,1%, its worst weekly result since March 2011. The Nikkei 225 fared even worse, shedding 7,5%. %, which is the worst performer among developed markets. Bucking the trend, Hong Kong's Hang Seng gained 3% in the second week of progress, the largest increase among 24 markets.
