Shanghai Stock Index Reverses its Loss while US, European, and other Asian Markets were Down
China's main Shanghai stock index finish higher Wednesday, but other stock markets were mostly lower as investors are anxious about the volatile Chinese market.
Other Asian stock markets were lower because of concerns of growth in the Chinese stocks. The uncertainty of the health of the Chinese economy has affected the US and European stock markets, which finish lower on Wednesday.
The Shanghai Composite Index plummeted down 5 percent during the day but rose 1.2 percent at 3,794.11 by the end. Meanwhile, Japan's Nikkei 225 dropped 1.6 to 20,222.63; South Korea's Kospi went down 0.9 percent to 1,939.38; Hong Kong's Hang Seng index fell by 1.1 percent to 22,228.11. Australia's S&P/ASX 200, however, wasn't among the stocks that went down, as it increased 1.5 percent to 5,380.20. Taiwan and Indonesian stocks were lower while Thailand and New Zealand stocks were stable.
The Shanghai stock had a significant drop during the trading session, but it later on reversed and went up. This turn up happened a day after investors sold Chinese stocks for fear that the Yuan may go down further. But the Yuan has been stable after it went through a series of devaluation. IG market analyst David Madded said, even though the Chinese equity market ended on a positive note, investors should be cautious with the erratic swings and wide trading range that signals the Chinese economy will be unstable for some time.
The uncertainty of the Chinese market affected other key commodities, like oil, energy and gas. October Crude is the heaviest traded contract. It went down $1.85 at $41.27 a barrel. September crude contract, on the other hand, went down $1.82 at $40.80 per barrel. Energy drag fell 4.3 per cent on the TSX. Natural gas dropped by half a cent to $2.71 per thousand cubic feet. Copper is now $2.28 a pound. Gold is now $1,127.90 an ounce.
The US dollar was also affected, as it fell to 124.232 yen from 124.391 yen. Meanwhile, the euro went up a bit to $1.107 from $1.103.