Asian markets suffer fresh beating as global rout resumes

21:15 | 11/02/2018
Asian trading floors were a sea of red once again on Friday (Feb 9) as the global rout returned with a vengeance on intensifying fears about tighter US interest rates.
asian markets suffer fresh beating as global rout resumes
Asian markets fell deep into the red again this week after another pummelling for stocks on Wall Street, fuelled by worries over rising interest rates AFP/GREG WOOD

Tokyo, Hong Kong and Shanghai were among the worst hit as they each plunged more than three per cent, while investors piled into safe haven assets such as gold and the yen.

The sell-off followed another battering for Wall Street, where the Dow suffered its second-heaviest daily points fall on record - the worst coming on Monday - after key US Treasury bond yields spiked fuelling the prospect of higher borrowing costs.

After a blistering 2017 and January, markets worldwide have gone into a spasm in the past two weeks on fears that the booming global economy and rising inflation will lead to higher interest rates.

"There's some big-money players that have really leveraged to the low rates forever, and they have to unwind those trades," Doug Cote, chief market strategist at Voya Investment Management, told Bloomberg News. "They could be in full panic mode right now."

Japan's Nikkei is now at levels not seen since mid-October, Hong Kong is on course to wipe out its 2018 gains and Shanghai is around a seven-month trough.

Elsewhere Sydney fell 1.3 per cent, Singapore shed 1.6 per cent and Seoul was more than two per cent off. Wellington, Manila and Taipei were also being battered.

A key trigger of the recent pullback was last Friday's strong US jobs report that also showed rising US wage growth, fuelling speculation the Federal Reserve will lift rates more than the three times already expected this year.

However, many analysts are upbeat about the future owing to healthy economic conditions in the US and global economies as well as the positive outlook for corporate earnings after Donald Trump's massive tax cuts in December.


Tokyo - Nikkei 225: DOWN 3.1 percent at 21,212.25 (break)

Hong Kong - Hang Seng: DOWN 3.6 percent at 29,357.80

Shanghai - Composite: DOWN 3.8 percent at 3,139.77

Euro/dollar: UP at $1.2258 from $1.2246 at 2200 GMT

Pound/dollar: UP at $1.3932 from $1.3912

Dollar/yen: UP at 108.80 yen from 108.74 yen

Oil - West Texas Intermediate: DOWN 62 cents at $60.53 per barrel

Oil - Brent North Sea: DOWN 46 cents at $64.35 per barrel

New York - DOW: DOWN 4.2 percent at 23,860.46 (close)

New York - S&P 500: DOWN 3.8 percent at 2,581.00 (close)

New York - Nasdaq: DOWN 3.9 percent at 6,777.16 (close)

London - FTSE 100: DOWN 1.5 percent at 7,170.69 (close)


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