Asian stocks started the week lower, following the fate of US index futures. The recent statements by the Federal Reserve that the slowdown in parts of the global economy could delay the rise in interest rates in the United States caused the ongoing pessimism. Also today, the yen rallied along with gold, while oil fell.
The MSCI Asia Pacific excluding Japan index fell 0,8% at 10:15am in Seoul, getting closer to its worst close since last March. Hong Kong's Hang Seng slipped 0,7% and the Shanghai Composite 1,1%. South Korean Kospi was down 0,7% on a day when the Japanese market was closed for holidays. Australia's S&P/ASX 200 was down 0,5% and New Zealand's NZX 50 was down 1%.
On the currency front, the Japanese currency strengthened to its highest levels in three weeks, while a series of currencies in the area, from the Korean one to the Australian dollar, lost in value.
With the Fed reportedly ending its bond-buying policy, equities fell in favor of safer assets. The weakness of the euro area and the Chinese slowdown are also worrying. China is expected to release trade data today, while in Hong Kong, the police began removing roadblocks at the start of a third week of protests.
“There are many good reasons to sell,” said Walter Todd, chief investment officer of Greenwood Capital Associates. “Investors are worried about the European situation and many are wondering how long the United States will continue to do OK without the rest of the world showing signs of improvement”.
