Global Economic Slowdown Fears Pressure Asian Shares

Given the escalating violence in Hong Kong, traders will be keeping a keen eye on the Hong Kong retail sales data for August. The sector has taken a hit amid protracted protests in the city that have lasted for months and periodically degenerated into violence.
James Hyerczyk
Asia Pacific Stocks

The major Asia Pacific stock indexes traded lower on Wednesday, following Wall Street’s lead, amid renewed fears of a global economic slowdown. The catalyst behind the weakness was a report on Tuesday that showed manufacturing activity in the U.S. contracted to its worst level since June 2009. This news was preceded by similar data from Europe.

At 05:21 GMT, Japan’s Nikkei 225 Index is trading 21775.21, down 110.03 or -0.50%. South Korea’s KOSPI Index is at 2040.52, down 31.90 or -1.54% and Hong Kong’s Hang Seng Index is trading 26050.97, down 41.30 or -0.16%.

In Australia, the S&P/ASX 200 Index is at 6656.50, down 86.30 or -1.28%. The markets are closed in China.

US Manufacturing Survey Shows Worst Reading in 10-Years

According to CNBC, a gauge of U.S. manufacturing showed the lowest reading in more than 10 years in September as exports dived amid the escalated trade war.

The U.S. manufacturing purchasing managers’ index from the Institute for Supply Management came in at 47.8% in September, the lowest since June 2009, marking the second consecutive month of contraction. Any figure below 50% signals a contraction.

The new export orders index was only 41%, the lowest level since March 2009, down from the August reading of 43.3%, ISM data showed.

“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding new-term growth,” Timothy Fiore, ISM chair, said in a statement.

Traders Watching Hong Kong Retail Sales Report

Given the escalating violence in Hong Kong, traders will be keeping a keen eye on the Hong Kong retail sales data for August, due to be released at 4:30 p.m. HK/SIN or 08:30 GMT. The sector has taken a hit amid protracted protests in the city that have lasted for months and periodically degenerated into violence. Additionally, the on-going U.S.-China trade war, has also been taking a toll on Hong Kong’s economy. Weak data could drive stocks lower.

“There is a recession underway in Hong Kong at the moment,” Isaac Poole, chief investment officer of Oreana Financial Services, told CNBC’s “Street Signs” on Wednesday.

“If we look back at the data we’ve now had three quarters of negative growth in the last five…in Hong Kong,” Poole said, adding that the third quarter this year is likely to be negative.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US