LONDON — The clear signal from the U.S. Federal Reserve that it will soon stop pumping money into the global economy and data pointing to Chinese growth slowing sparked sharp falls in bonds, shares and commodities on Thursday.
Emerging markets, many of which have been primed by the cheap Fed cash, saw some of the biggest selling as investors rushed to the exits.
Wall Street slumped at the open on Friday, falling for the fourth straight session, as more grim data from China spooked investors already worried about the pace of global growth. The Dow Jones industrial average was poised to for its sharpest weekly fall since November, 2011. The Nasdaq composite and the S&P 500 were on track for their steepest weekly fall since May 2012. All 10 major S&P sectors were in the red, led by the consumer sector, and seven of the 10 were down more than 0.8 per cent.
The HSBC China Flash PMI tumbled to an eight-month low of 48.1 from 48.5 in February. Economists were looking for the index to climb to 48.7. And any reading below 50 signals contraction. Interestingly, markets have held up in the wake of the news. China's Shanghai Composite climbed 0.9% and Hong Kong's Hang Send jumped 1.9%.
Wall Street began the week in the red on Monday and fell sharply on concerns about China's slowing growth in the wake of the biggest drop in Shanghai shares in eight years. The Dow Jones industrial average fell to its lowest level in over five months while the Nasdaq composite was at a four-week low and the S&P 500 touched its lowest in more than two weeks. Chinese shares tumbled more than 8 per cent as an unprecedented government rescue plan to prop up valuations abruptly ran out of steam, raising doubts about the viability of Beijing's efforts to stave off a deeper crash.
Hong Kong (AFP) - Asian markets suffered fresh selling pressure Monday, while the dollar dipped and oil hit multi-year lows, following another round of losses on Wall Street fuelled by global growth concerns.
Different markets sending different signals. That's the gist of BofA Merrill Lynch rates guru David Woo's latest report – titled "The impossible trinity: A tale of three cities" – which begins like this (emphasis added):
Washington (AFP) - The International Monetary Fund on Tuesday sharply cut its 2015-2016 world growth forecast of only six months ago, saying lower oil prices did not offset pervasive weaknesses around the globe.