HONG KONG: Asian markets fell today, hit by concerns about the uncertain global economic outlook, the China-US trade war and tepid corporate earnings reports.
With an expected Federal Reserve interest rate cut already priced in, having fuelled a healthy rally, and few other catalysts to drive buying, analysts said investors are also cashing out.
The losses in Asia followed a negative lead from Wall Street, where big-name firms including Caterpillar and United Technology sank on weak corporate reports.
“Stocks’ strong gains are finally succumbing to profit-taking,” Alec Young at FTSE Russell told Bloomberg News.
“Earnings and guidance so far have been mixed and, given the big run-up, it’s no surprise there’s little investor tolerance for even a hint of disappointment.”
Tokyo led losses, sinking 2% as it was hit by a stronger yen and data showing another drop in exports as Japan feels the impact of falling demand and global trade uncertainty. It was Japanese shares’ biggest one-day fall in nearly four months.
The Nikkei share average fell 1.97% to 21,046.24 points, hitting a one-month low and marking its second biggest slide so far this year only after a 3% plunge on March 25.
“The earnings of global manufacturers will be soft for now. Investors are on the sidelines and waiting to buy on dips only if the Nikkei falls below 21,000,” said Takashi Hiroki, chief strategist at Monex Securities.
Hong Kong ended down 0.5% and Shanghai shed 1%, while Sydney and Singapore each gave up 0.4%. Seoul fell 0.3%, with traders unmoved by the Bank of Korea’s first interest rate cut in three years. The won edged up.
Taipei was off 0.3% and Mumbai eased 0.4%. However, Wellington, Jakarta, Bang-kok and Manila eked out small gains.
The weakness spread to Europe, as the main stock markets slid at the start of trading today. London’s FTSE 100 index dropped 0.5%. In the eurozone, Frankfurt’s DAX 30 index shed 1.3% and the Paris CAC 40 lost 0.6%.
