Asia Stocks Fall to Lowest Since 2011, Extending Global Selloff

Asian stocks declined, with a regional measure falling to its lowest level in more than four years, as concern about China’s growth outlook continued to fan a global selloff.

The MSCI Asia Pacific excluding Japan Index tumbled 2 percent to 374.51 as of 4:04 p.m. in Hong Kong, heading for its lowest close since October 2011, after sinking 7.1 percent last week. Markets in Tokyo are closed Monday for a holiday. Turmoil in China’s markets rippled around the world in the first week of 2016 as the securities regulator scrapped an equity circuit breaker after just four days and the central bank set a weaker yuan fix for eight days in a row, escalating fears of a global currency war.

China’s Shanghai Composite Index slumped 5.3 percent to the lowest close in almost four months, while the Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong declined 3.9 percent. The offshore yuan erased early losses after China’s central bank kept the currency’s daily fixing stable for the second day in a row.

The stock market’s extreme market swings this year and a sliding yuan have revived concern over the Communist Party’s ability to manage an economy set to grow at the weakest pace since 1990. China’s consumer price index rose 1.6 percent in December from a year earlier, the National Bureau of Statistics said on Saturday. That followed a gain of 1.5 percent in November. The producer price index fell 5.9 percent, extending its record run of declines to 46 months.

South Korea’s Kospi index and Australia’s S&P/ASX 200 Index both fell 1.2 percent. New Zealand’s S&P/NZX 50 Index lost 0.9 percent. Hong Kong’s Hang Seng Index sank 2.8 percent. Singapore’s Straits Times Index dropped 2.1 percent. Taiwan’s Taiex index slipped 1.3 percent.

E-mini futures on the Standard & Poor’s 500 Index fluctuated on Monday after the underlying gauge sank 6 percent last week. Concern about China’s market turmoil overshadowed a Labor Department report on Friday showing that employers added 292,000 workers to payrolls in December, exceeding the highest estimate in a Bloomberg survey and putting the gain for all of 2015 at 2.65 million.

 

Source : Bloomberg

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Japan Stocks Slip, Extending Worst Start to Year Since 2008

Japanese stocks fell for a second day as shares in China continued their New Year rout and the yen held near a two-month high.

The Topix index declined 0.3 percent to 1,504.71 at the close in Tokyo after dropping 2.4 percent Monday, its worst opening day of a year since 2008. The yen traded at 119.44 per dollar, near its highest level since October. Shares in Shanghai extended Monday’s plunge, which most investors pinned on weak Chinese economic data and this week’s possible end of a ban on share sales.

The Nikkei 225 Stock Average lost 0.4 percent to close at 18,374. Volatility on the gauge slipped 0.5 percent to 23.22, a day after surging 20 percent. The current level is still below the peak of 47.01 reached at the height of last year’s selloff on Aug. 25.

Evidence of slowing manufacturing in China and investor anxiety over the end of a ban on share sales by major stakeholders expected on Jan. 8 weighed on sentiment for a second day, with the Shanghai Composite Index falling 1.4 percent, paring early gains of as much as 1 percent. Trading in China was halted on Monday after a 7 percent drop engaged the nation’s new market circuit breakers on their first day.

E-mini futures on the Standard & Poor’s 500 Index added less than 0.1 percent. The underlying measure closed 1.5 percent Monday lower after paring losses in late afternoon trading. Manufacturing in the U.S. contracted in December at the fastest pace in more than six years as factories, hobbled by sluggish global growth, cut staff at the end of 2015. The Institute for Supply Management’s index declined to 48.2, the weakest since June 2009, from 48.6 a month earlier.

Source: Bloomberg

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