Asian markets trade lower as US risk-off sentiment kicks in
Asian markets have been trading weaker after a sell-off was recorded on the US bourses. Renewed concerns about global growth and effectiveness of central bank policy have dampened the investor sentiment. Major US indices Dow Jones, S&P-500 and Nasdaq indices were trading lower as well while Wall Street suffered major drop in two months.
MSCI Asia Pacific Index shed 0.5 percent. China, Hong Kong, Japan, India, Korean markets were trading marginally lower as well. Despite some recovery, Australian ASX 200 index was trading marginally lower 0.4 percent. Australia's financial sub-index recouped losses of over 1.4 percent, but still trading lower to 0.42 percent. S&P BSE Sensex on the other hand, shed 0.16 percent or 40.07 points to close at 24,644.75 points.
CNBC reports that Japanese markets witnessed sell off in early trading and ended with a marginal loss of 0.46 percent. Shanghai Composite index ended lower by 0.56 percent and Shenzhen composite index shed 0.74 percent. Hang Seng index eased 0.88 percent while Nikkei-225 index fell 0.38 percent to 15,690.73 points. The latest bout of risk off on the Wall Street had direct impact on Asian markets.
Dow Jones' industrial average eased 0.98 percent as S&P-500 index shed 1.2 percent. Meanwhile, Nasdaq composite index fell 1.47 percent. Australia's four major banks - ANZ, Commonwealth Bank of Australia, NAB and Westpac- were trading in a mixed pattern, moving in the range of 0.17 percent upwards and 0.73 percent downwards.
Financial Times further adds that the stronger Yen and sell-off on the Wall Street worsened the investor sentiment. Japanese currency Yen rose to Y107.67 per US dollar indicating its strongest position since October 2014. The Bank of Japan (BoJ) has taken a decision to enhance quantitative easing program that surprised the markets. On last Friday, Yen eased by 0.5 percent to Y108.73 per dollar. This was fthe irst drop in seven sessions. Yen gained 2.6 percent, registering its biggest weekly rally since 12 February 2016.
Ray Attrill, global co-head of foreign exchange strategy at the National Australia Bank, said "It's been a distinctly 'risk-off' night as financial stocks took a beating overnight. Increased dissolution about what central policies will continue to do to financial sector profitability may be a factor here."
Tracking heavy sell off on the Wall Street, Asian stocks, too, are moving southwards as traders avoid taking risk. On the other side, the oil price rose.
Consumers stocks led the losses on Asian bourses. In fact, South Korean currency Won and Malaysia's Ringgit turned weaker against the US dollar. Australian government bonds gained tracking advances in Treasuries. Recovering loss of 1.3 percent in previous session, West Texas Intermediate (WTI) crude rose two percent to $37.99 a barrel while Brent gained 1.4 percent to $39.97 per barrel, as reported by Bloomberg.
Investors are looking to the first quarter earnings season as it's slated for taking off from Monday onwards. Banks are expected to reveal a rotten start to the year. The dollar index, which tracks US dollar against a basket of currencies, moved up 0.15 percent to 94.61. Australian dollar and Chinese Yuan turned weaker against the US dollar.