The risk aversion tightened its grip on the Asia Pacific share market on
last trading session of the week, Friday, 21 August 2015, as investors'
nerves took another hit after a gauge of Chinese manufacturing plunged
to the lowest since 2009.The China-led risk aversion was bolstered by
fresh risk-off events on Thursday – Greek PM resignation, geopolitical
risk (North Korea), and fresh signs of currency wars. Stoking selloff,
the US stock markets suffered massive losses as well overnight, with
S&P 500 dropping below one of its most closely watched indicators, a
200-day moving average.
The preliminary Caixin China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, dropped to a 77-month low of 47.1 in August, compared with a final reading of 47.8 in July. The reading was the worst since March 2009, in the depths of the global financial crisis, and the sixth straight one below the 50-point level, which separates growth in activity from contraction on a monthly basis. The flash PMI, the earliest economic measure to be released about China each month, is closely followed by global investors for clues on the health of the economy.
Geopolitical tension revives after North Korean leader Kim Jong-un has ordered his frontline troops to be on a war footing, after an exchange of fire with the South across their heavily fortified border.
China's move last week to devalue the yuan has drawn much bad press, sparking talk of competitive devaluation, or currency wars. Slower growth in China means falling demand for and hence import of raw materials and energy from commodity-exporting countries like Canada, Australia, Brazil, Indonesia and many other developing economies. This further depresses the currencies of these countries, already suffering from an outflow of capital to the higher-growth, soon-to-be-higher- interest-rate US.
In Greece, Prime Minister Alexis Tsipras resigned on Thursday and called snap elections in September, a move aimed at strengthening his grip on power. After fighting the last election on an anti-austerity platform, and spending much of his first six months in office attempting to reverse some of the changes made in Greece under its international bailout, he was eventually forced to back down in negotiations with the country's creditors in July.
Among Asian bourses
Australian market tumbles to 8-month low
The Australian share market plummeted to eight month low as risk aversion selloff after weaker-than-expected China manufacturing data heightened concern the economic slowdown in Australia's biggest trading partner is deepening. All ASX sectors closed lower, with financials were the hardest hit. Meanwhile, selloff pressure was evident in realty, property trusts, healthcare and retailers. The benchmark S&P/ASX 200 Index stumbled 74 points, or 1.4%, to 5214.60 points, while the broader All Ordinaries Index tanked 70.70 points, or 1.34%, to 5224.80 points.
Nikkei tanks 3%
Japanese share market finished the session steep lower as drop in the Wall Street overnight, stronger yen, weaker-than-expected China manufacturing data, and the prospect of higher US interest rates has spurred a wave of selling across sectors. All of the gauge's 33 industry groups declined, with shares of insurance, real estate, banks, utilities, brokerage houses, shippers and resources being key losers. The Nikkei Stock Average tumbled 597.69 points, or 2.98%, to end at 19435.83 points. The broader Topix index ended 50.87 points, or 3.13%, lower at 1573.01 points. For the week, the Nikkei index lost 5.3%.
China market tanks 4.3%
The risk aversion tightened its grip on the Mainland China's stock market, as investors nerves took another hit by a private gauge of Chinese manufacturing unexpectedly falling to its lowest level in more than six years. All sectors weakened, with shares of technology and consumer goods players were the biggest decliners. The benchmark Shanghai Composite Index closed down by 4.27%, or 156.55 points, to 3507.74 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, de-grew 5.4%, or 116.10 points, to 2039.40 points. Total volume of A shares traded in Shanghai was 37 billion shares, while Shenzhen volume was 26.01 billion shares.
The gloomy PMI figure followed other official data last week that showed growth in China's factory output, investment and retail sales were all weaker than expected in July, dashing hopes that the economy was finally stabilizing after a flurry of support measures over the last year, including four interest rate cuts and a massive stock market rescue.
Hong Kong market enters in bear terrain
Hong Kong stock market declined for sixth straight session, as concern a slowing China economy and weaker yuan will spur capital outflows. Meanwhile, the weakest Chinese manufacturing data since the global financial crisis accelerated losses in riskier assets. The Hang Seng Index ended down 347.888 points, or 1.53%, at 22409.62 points, taking declines since an April 28 high beyond 20% level that signifies the start of a bear market. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, lost 207.67 points, or 2%, to 10195.05 points. Turnover increased to HK$118.3 billion from HK$105 billion on Thursday.
Sensex falls on tracking global selloff
Indian share market ended lower as fears of a China-led deceleration in global growth and escalating tension between South Korea and North Korea gripped markets. Sensex and Nifty provisionally closed 241.75 points and 72.80 points lower at 27,366 and 8,299.95, respectively.
Almost all sectors languished in the red, with financial and auto and auto-ancillary stocks suffering the biggest cuts.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1007.26 crore yesterday, 20 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 567.87 crore yesterday, 20 August 2015, as per provisional data.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 3% to 7786.92. South Korea's KOPSI declined 2% to 1876.07. New Zealand's NZX50 rose 0.2% to 5751.19. Singapore's Straits Times index shed 1.3% at 2971.01. Indonesia's Jakarta Composite index sank 2.4% to 4335.95. Malaysia's KLCI fell 0.2% to 1574.67.
The preliminary Caixin China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, dropped to a 77-month low of 47.1 in August, compared with a final reading of 47.8 in July. The reading was the worst since March 2009, in the depths of the global financial crisis, and the sixth straight one below the 50-point level, which separates growth in activity from contraction on a monthly basis. The flash PMI, the earliest economic measure to be released about China each month, is closely followed by global investors for clues on the health of the economy.
Geopolitical tension revives after North Korean leader Kim Jong-un has ordered his frontline troops to be on a war footing, after an exchange of fire with the South across their heavily fortified border.
China's move last week to devalue the yuan has drawn much bad press, sparking talk of competitive devaluation, or currency wars. Slower growth in China means falling demand for and hence import of raw materials and energy from commodity-exporting countries like Canada, Australia, Brazil, Indonesia and many other developing economies. This further depresses the currencies of these countries, already suffering from an outflow of capital to the higher-growth, soon-to-be-higher- interest-rate US.
In Greece, Prime Minister Alexis Tsipras resigned on Thursday and called snap elections in September, a move aimed at strengthening his grip on power. After fighting the last election on an anti-austerity platform, and spending much of his first six months in office attempting to reverse some of the changes made in Greece under its international bailout, he was eventually forced to back down in negotiations with the country's creditors in July.
Among Asian bourses
Australian market tumbles to 8-month low
The Australian share market plummeted to eight month low as risk aversion selloff after weaker-than-expected China manufacturing data heightened concern the economic slowdown in Australia's biggest trading partner is deepening. All ASX sectors closed lower, with financials were the hardest hit. Meanwhile, selloff pressure was evident in realty, property trusts, healthcare and retailers. The benchmark S&P/ASX 200 Index stumbled 74 points, or 1.4%, to 5214.60 points, while the broader All Ordinaries Index tanked 70.70 points, or 1.34%, to 5224.80 points.
Nikkei tanks 3%
Japanese share market finished the session steep lower as drop in the Wall Street overnight, stronger yen, weaker-than-expected China manufacturing data, and the prospect of higher US interest rates has spurred a wave of selling across sectors. All of the gauge's 33 industry groups declined, with shares of insurance, real estate, banks, utilities, brokerage houses, shippers and resources being key losers. The Nikkei Stock Average tumbled 597.69 points, or 2.98%, to end at 19435.83 points. The broader Topix index ended 50.87 points, or 3.13%, lower at 1573.01 points. For the week, the Nikkei index lost 5.3%.
China market tanks 4.3%
The risk aversion tightened its grip on the Mainland China's stock market, as investors nerves took another hit by a private gauge of Chinese manufacturing unexpectedly falling to its lowest level in more than six years. All sectors weakened, with shares of technology and consumer goods players were the biggest decliners. The benchmark Shanghai Composite Index closed down by 4.27%, or 156.55 points, to 3507.74 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, de-grew 5.4%, or 116.10 points, to 2039.40 points. Total volume of A shares traded in Shanghai was 37 billion shares, while Shenzhen volume was 26.01 billion shares.
The gloomy PMI figure followed other official data last week that showed growth in China's factory output, investment and retail sales were all weaker than expected in July, dashing hopes that the economy was finally stabilizing after a flurry of support measures over the last year, including four interest rate cuts and a massive stock market rescue.
Hong Kong market enters in bear terrain
Hong Kong stock market declined for sixth straight session, as concern a slowing China economy and weaker yuan will spur capital outflows. Meanwhile, the weakest Chinese manufacturing data since the global financial crisis accelerated losses in riskier assets. The Hang Seng Index ended down 347.888 points, or 1.53%, at 22409.62 points, taking declines since an April 28 high beyond 20% level that signifies the start of a bear market. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, lost 207.67 points, or 2%, to 10195.05 points. Turnover increased to HK$118.3 billion from HK$105 billion on Thursday.
Sensex falls on tracking global selloff
Indian share market ended lower as fears of a China-led deceleration in global growth and escalating tension between South Korea and North Korea gripped markets. Sensex and Nifty provisionally closed 241.75 points and 72.80 points lower at 27,366 and 8,299.95, respectively.
Almost all sectors languished in the red, with financial and auto and auto-ancillary stocks suffering the biggest cuts.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1007.26 crore yesterday, 20 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 567.87 crore yesterday, 20 August 2015, as per provisional data.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 3% to 7786.92. South Korea's KOPSI declined 2% to 1876.07. New Zealand's NZX50 rose 0.2% to 5751.19. Singapore's Straits Times index shed 1.3% at 2971.01. Indonesia's Jakarta Composite index sank 2.4% to 4335.95. Malaysia's KLCI fell 0.2% to 1574.67.
