Global rout returns as Asian markets resume slump
HONG KONG: Tokyo led another market sell-off Thursday as equities and currencies succumbed again to a vicious rout that has ripped across global trading floors.
Any hope Wednesday’s regional rally might pressage a recovery from 2016’s bloodbath was wiped out with an immediate sell-off in the opening minutes.
Tokyo plunged almost four percent in the first hour and Shanghai fell below its lowest levels of the summer rout.
The losses came after Wall Street’s three main indexes dropped, with energy firms taking a hammering again as oil prices hit lows not seen since the first half of 2004.
That overshadowed a better-than-forecast Chinese trade report, which provided some rare good news about the world’s second biggest economy.
“It’s hard to get bullish at this stage,” Michael McCarthy, chief strategist at CMC Markets in Sydney, told Bloomberg News.
“The market focus keeps shifting whenever there’s positive news. We saw very good trade numbers from China yesterday and yet we’ve seen the rebound being short-lived as the focus shifted to commodities. Negative sentiment is dominating.”
Japan’s Nikkei was down 3.7 percent by lunch, while Hong Kong lost two percent, Sydney shed 1.8 percent and Seoul was 1.4 percent lower.
The losses swept away gains posted on Wednesday.
Shanghai fell 1.2 percent, having bucked the regional trend the previous day when it lost 2.4 percent. The index is now more than 17 percent down for the year already. It is the worst performer among 93 benchmark indexes tracked by Bloomberg.