Stock slump resumes in Asia, oil prices up

Stock slump resumes in Asia, oil prices up

A woman walks past an electronic board showing the Hong Kong share index price outside a bank in Hong Kong on Monday. (AP photo)
A woman walks past an electronic board showing the Hong Kong share index price outside a bank in Hong Kong on Monday. (AP photo)

A rebound in global equities on Friday saw no traction at the start of the week, with markets in Asia dropping on Monday.

Equities in Japan, Hong Kong and Australia bore the brunt as a risk-off mood returned in choppy trading, following a weekend of warnings on global economic fragility from finance chiefs meeting at an annual IMF gathering.

China’s stocks fluctuated near a four-year low. International Monetary Fund Managing Director Christine Lagarde advised to be ready for more market volatility, speaking after the worst sell-off in global stocks since February.

China’s ambassador to the United States, in a rare American Sunday TV appearance, said his nation didn’t want a trade war but will respond.

Treasuries nudged higher amid the cautious tone in markets, with the yield on the 10-year benchmark slipping to 3.15%. The yen pushed higher alongside gold prices. Oil climbed amid rising tensions between the US and Saudi Arabia over a missing journalist.

The gloomy remarks over the weekend contrasted with the modest recovery in stocks that was staged on Friday, when news on US bank earnings helped cool anxiety that corporate profits might not live up to lofty expectations.

Goldman Sachs, Morgan Stanley and Netflix are among those reporting this week. Also to come: minutes from the Federal Reserve’s latest policy meeting due on Wednesday, with investors keen to follow the debate on projections for further interest rate rises.

“Investors are now trying to decide how they should accurately price growth,” Fabiana Fedeli, Robeco’s global head of fundamental equities, said on Bloomberg TV in Hong Kong. “Now the key question investors are having is ‘am I really paying the right price for this growth because we think earnings are fantastic, but what’s going to happen ahead, are they still going up to the extent valuations would imply?”’

The pound fell as a surprise Sunday visit to Brussels by UK Brexit Secretary Dominic Raab failed to break the deadlock. People familiar with the situation said there were signs of progress, but officials on both sides played down the chances of an imminent agreement and denied a Politico report that a deal was done.

Stocks

  • Japan’s Topix index fell 1% as of 12.39pm in Tokyo
  • Australia’s S&P/ASX 200 Index slid 1.2%
  • South Korea’s Kospi index lost 0.6%
  • Hong Kong’s Hang Seng Index fell 1.1%
  • The Shanghai Composite sank 0.8%
  • Futures on the S&P 500 Index fell 0.3%. The benchmark tumbled 4.1% last week
  • The MSCI Asia Pacific Index lost 1%

Commodities

  • West Texas Intermediate crude rose 1% to $72.07 a barrel
  • Gold rose 0.4% to $1,221.56 an ounce
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