Image: Reuters Berita 24 English - On Tuesday, it was hard for Asian markets to figure out what to do. Worries about global growth after wea...
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| Image: Reuters |
Berita 24 English - On Tuesday, it was hard for Asian markets to figure out what to do. Worries about global growth after weak data from China pushed down oil prices and currencies tied to commodities.
As investors rushed back into the dollar, which is seen as a safe haven, the Aussie dollar, the euro, and the Chinese yuan all fell.
MSCI's broadest index of Asia-Pacific shares outside of Japan went up by 0.2%, making up for the losses from Monday. MSCI's main index is up 5% from its lowest point of the year, but it is still down 15% so far this year.
Just as investors were feeling good about a four-week rally in global stocks that pushed markets to their highest point in more than three months, China's industrial output and retail sales data on Monday were less than impressive.
Also, the confidence of U.S. single-family homebuilders and factory activity in New York state fell to their lowest levels since the COVID-19 pandemic began. This is another sign that the world's largest economy is weakening as the Federal Reserve raises interest rates.
"In short, the chances of a global recession have become much clearer all of a sudden. But for some, they were "always" clear, "In a note, Rabobank said. "And does anyone think that a turn by the central bank at this point will make them less likely?"
Tuesday was a mixed day for Asian stock markets. Benchmarks in Tokyo and Taiwan didn't change much, but South Korean stocks went up 0.5%.
The Chinese stock market went up a day after the central bank cut interest rates without warning after data showed that the economy and credit growth slowed down sharply in July. After going down on Monday, the CSI 300 index went up by 0.1%.
Monday, major indexes on Wall Street went up, reversing losses from earlier in the day. Stocks have gone up for four weeks in a row on hopes that U.S. inflation will slow down, which could slow down the Fed's rate hikes.
The U.S. economy shrank in the first and second quarters, which added to the debate about whether or not the country is in recession or will soon be.
There were also a lot of worries about growth in Europe.
Monday, the yields on government bonds in the Euro Zone went down. Investors were worried about a possible recession and worried that Germany's production might be cut because of possible gas rationing.
The dollar index, which compares the dollar to six major currencies, stayed the same on Tuesday at 106.53, just below the previous session's high point of 106.55, which was the highest level since Monday of last week.
The euro, which has the most weight in the dollar index, stayed the same at $1.0158 after falling to its weakest level since August 5 at $1.0154.
The Australian dollar dropped as low as $0.70005, putting it in danger of being worth less than 70 cents for the first time since Wednesday. The kiwi fell to $0.6349, which is also the lowest it has been since Wednesday.
The weak outlook for demand hurt oil prices, which continued to fall from the previous session.
Brent crude futures dropped 1% to $94 a barrel after falling to their lowest level since before Russia sent troops into Ukraine on February 24. WTI crude futures fell 0.7% to $88.80 per barrel.
