Stocks Stumble As China Slowdown Rattles Investors

0 315

Asian stocks fell to a two-year low and were heading for a weekly loss; while they set the dollar for its third week of gains after a fresh round of rate hikes globally deepened concern about the outlook for world economic growth.

Although wagers on a 100 basis point hike from the U.S. Federal Reserve later this month eased off a little when Fed officials hosed down that possibility; bond markets remain priced for steep hikes to slam the brakes on output. China’s economy is another big worry. It contracted sharply in the second quarter, while homebuyers’ threats also rattled investors to cease mortgage repayments.

MSCI’s index of Asia-Pacific shares outside Japan touched a two-year trough and was last down 0.6%. Property stocks in Hong Kong slumped 3% and mainland banks fell 1%, though stimulus hopes kept the rest of the market from further losses.

Modest positive sentiment has also come from two Fed officials pouring cold water on talk of a 100 bp rate hike; against a backdrop of steep hikes in Canada, New Zealand, South Korea and surprise tightening.

-Reuters.

Leave A Reply