Stock Markets Buckle Under Weight Of Global Worries
Sumaira FH 11 days ago Tue 13th August 2019 | 07:20 PM
London, (UrduPoint / Pakistan Point News - 13th Aug, 2019 ) :Stock markets retreated Tuesday as tensions in Hong Kong, economic crisis in Argentina, uncertainty over US-China trade talks and fears of a global slowdown combined into a menacing cocktail of worry.
"A burst of geopolitical risks across the globe is severely burning stock markets and fuelling risk aversion," said Lukman Otunuga at FXTM.
"The US-China trade standoff, aggressive easing from some central banks, worries about a no-deal Brexit, chatter that Germany is heading towards a recession, political uncertainty in Italy, the financial meltdown in Argentina, and the tensions in Hong Kong are all contributing to the poor economic climate," said David Madden, analyst at trading group CMC Markets UK.
Markets might have been able to digest the issues one by one, but investors were finding their accumulation hard to stomach, said Craig Erlam at OANDA.
- One thing after another - "It's easy to ignore these issues when they are few and far between but we seem to be speaking about a new potential problem on a regular basis," he said.
Hong Kong's main shares index finished down more than two percent Tuesday, while Shanghai lost 0.6 percent.
Tokyo retreated more than one percent as exporters were hit by a rush into the Yen, seen as a safe haven investment.
- 'Economic populism is alive' - Emerging market currencies recovered from Monday's losses that came on the back of the shock win in an Argentina presidential Primary election by populist centre-left candidate Alberto Fernandez over incumbent Mauricio Macri.
OANDA Asia-Pacific senior market analyst Jeffrey Halley said "economic populism is alive and well in all corners of the globe -- a far more worrying development in the long-term than a US-China trade war".
Back in Europe, there was much concern at a surprisingly weak key survey out of Germany, by the ZEW institute, showing that confidence among investors hit its lowest ebb in almost eight years in August.
Analysts said a slowdown in powerhouse Germany would have repercussions across the eurozone.
- No eurozone pick-up - "This highlights the continuing uncertainty hanging over the bloc, with sentiment indicators so far suggesting that a pick-up in GDP growth in the second half of 2019 is not on the cards," analysts at Oxford Economics said.
"Sterling has found some very mild support from better wage data -- pay up by the most in 11 years makes for a good headline for sure, but the risk of no-deal Brexit ultimately weighs," said Neil Wilson, chief analyst at Markets.com.