Asian stock markets helpless, as fears of recession, still loom. A slew of weak economic statistics caused most Asian stocks to trade flat to low range.
Asian stock markets are weighed by weaker economic data and recession fears
On Wednesday, most Asian equities traded in a range from flat to down to an array of weak economic reports. Which increased worries about declining economic growth. Japan’s Nikkei index fell the most amidst profit-taking.
As a result of declines in the automotive and petroleum sectors, the Nikkei 225 fell 1.6% on Wednesday, making it the worst-performing stock in Asia. Following the index’s third consecutive day of increases, investors cashed in some profits.
Export-oriented stocks suffered as a result of the strengthening yen. Which saw rising interest as a safe haven due to increasing concerns about a recession in the US.
Asian and global stocks feel the jitters from weakening manufacturing and banking sectors
Following a string of weaker-than-anticipated economic readings from key economies, risk sentiment took a beating this week. Whereas Jamie Dimon, CEO of JPMorgan (NYSE: JPM), cautioned that the turmoil in the banking sector was not yet over. Wall Street indexes declined overnight after statistics indicated a downturn in the U.S. employment market.
Federal Reserve officials also cautioned that despite the slowing growth of the economy. The interest rates in the United States could continue to rise.
This, along with indicators of persistent weakness in the global industrial sector. Increased worries about a possible recession this year. Fears of high fuel costs keeping inflation high were also raised by a spike in oil prices. Following a surprise reduction in production by OPEC.
Most Stocks decline in Asian session trading
Thai stocks led losses in Southeast Asia with a 0.6% drop, while the Taiwan Weighted index of Asian stocks was flat.
Inflation decreased more than anticipated in March, according to statistics. Philippine stocks were one of the day’s few outliers, rising 0.5%. KOSPI in South Korea increased by 0.4% as well after statistics early this week indicated that inflation was slowing.
After Reserve Bank Governor Philip Lowe issued a warning that the bank might still raise interest rates to combat high inflation. Even after it kept rates unchanged on Tuesday, Australia’s ASX 200 dropped 0.1%.
Asian Forex Markets
On Wednesday, Asian currencies were flat to lower while the dollar remained at two-month lows. As weak economic reports stoked growing worries about a recession this year.
The only exception among all world currencies was the New Zealand dollar. Which increased by 0.6% after the Reserve Bank of New Zealand increased interest rates by a larger-than-expected 50 basis points. And signaled further action to combat rising inflation. However, as the nation heals from the effects of cyclone Gabrielle earlier this year. The central bank also issued a warning about slowing economic development.
However, most other currencies showed a downward tendency, and trading activity in Asia was also subdued. Due to the Chinese market break.
The AUD slips and the US dollar was mostly flat
The Reserve Bank’s decision to maintain interest rates stable caused the Australian dollar to decline by 0.1%, adding to Tuesday’s losses. However, the dollar recovered some of its losses after RBA Governor Philip Lowe issued a warning that rates could still go up further.
The US dollar index and futures saw little movement in Asian trade as the U.S. currency remained near a two-month bottom. After U.S. job vacancies decreased more than forecast in Feb. The dollar dropped overnight, suggesting that the labor market will continue to cool.
While the possibility of a less aggressive Fed is positive for Asian currencies. And worries of economic contraction kept markets wary of risky assets, which hurt regional markets. Demand for safe havens like gold rose as is now edging closer to a new peak.
