Asian shares, oil skid on global growth worries

In Asia, losses were led by Chinese shares, with the blue-chip index off 1.2 per cent. Hong Kong’s Hang Seng index was down more than 1 per cent and Australia’s main share index faltered 0.5 per cent. — Reuters pic
In Asia, losses were led by shares, with the blue-chip index off 1.2 per cent. Hong Kong’s Hang Seng index was down more than 1 per cent and Australia’s main faltered 0.5 per cent. — Reuters pic

SYDNEY, Jan 22 — Asian shares stumbled and oil prices fell today as pessimism about world growth drove investors away from risky assets, while sterling ticked lower in the face of the latest twists and turns in the Brexit saga.

got the week off to a shaky start yesterday after Beijing reported 2018 growth in the world’s second-largest economy slowed to its weakest pace in nearly 30 years. Adding to the air of caution, the International Monetary Fund trimmed its forecasts and a survey showed increasing pessimism among business chiefs as trade tensions loomed.

The gloomy news highlighted the challenges facing policymakers globally as they tackle an array of current or potential crises, from the US-China trade war to Brexit.

Spreadbetters point to another weak start for Europe. FTSE futures were off 0.2 per cent while futures, which offer an indication of how will open, were down about 0.7 per cent.



In Asia, losses were led by Chinese shares, with the blue-chip index off 1.2 per cent. Hong Kong’s Hang Seng index was down more than 1 per cent and Australia’s main share index faltered 0.5 per cent.

MSCI’s broadest index of Asia- shares outside Japan slipped 0.9 per cent today, drifting away from a recent seven-week top.

Japan’s Nikkei, which had opened firmer, skidded 0.7 per cent.

US markets were closed yesterday for a holiday so trading was generally subdued overnight. However, equity prices in Europe and Latin stumbled after the weak Chinese data.

“Concerns over slowing global growth are starting to filter through to financial markets,” said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia.

Those worries sent prices for copper, used in electrical wires and vehicles, drifting lower.

In another sign of risk aversion, the Australian dollar , often used as a liquid proxy for China investments, eased 0.3 per cent to US$0.7134 (RM2.95), putting it on track for a third straight session of losses.

No deal Brexit?



“The focus will be firmly on the UK once the London market opens with Brexit news still front of mind for investors,” Twidale added.

“Brexit remains a major concern for UK markets and progress appears to be limited. With deadlines fast approaching and what seems to be a real impasse between the various sides involved, the prospect of a hard ‘no deal’ Brexit appears to becoming more likely.”

Sterling was a shade weaker at US$1.2872 as British Prime Minister Theresa May refused to rule out a no-deal Brexit. There are few signs she can break a deadlock with parliament after her Brexit deal was rejected last week.

May offered to tweak her defeated deal by seeking further concessions from the European Union on a backup plan to avoid a hard border in Ireland.

“Any upside for sterling in the near term may be limited,” said Capital Economics analyst Liam Peach. “Uncertainty would continue during the extended negotiations and there is no guarantee that it would last for only a short period of time.”

Analysts said investors were nervous about building positions in the pound, specially given the possibility of Britain leaving the EU without a deal.

Demand for the safe-haven yen kept the greenback under pressure with the Japanese currency last buying at 109.41 per dollar. The euro was near the floor of its recent trading range at US$1.1358. Against a basket of currencies, the dollar was barely changed at 96.393.

In commodities, global growth worries pulled oil prices lower with down 55 cents at US$62.19 and US crude futures off 39 cents at US$53.41. — Reuters



Source: The Malay Mail Online





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