Amid slowing service sectors and falling manufacturing data, experts warn of a potential recession in Europe and the US
06 September 2023 - 07:31
by Agency Staff
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Hong Kong — Asia stocks fell on Wednesday after weak economic data in China and Europe heightened concerns over global growth, while the dollar firmed as investors weighed the outlook for US interest rates.
MSCI’s gauge of Asia-Pacific shares outside Japan was down 0.5% at 1.43am GMT.
Australia’s S&P/ASX 200 fell 0.55% even as second-quarter GDP beat forecasts with a 0.4% rise.
The Hang Seng index and China’s benchmark CSI300 index both opened down about 0.3%.
A private sector survey on Tuesday showed China’s services activity expanded at the slowest pace in eight months in August, reflecting weak demand.
Manufacturing data from Germany, Britain and the euro area also showed declines, while their service sectors fell into contraction.
“The China decline was bigger than expected,” said Redmond Wong, Greater China market strategist at Saxo Markets.
“The Chinese government has become more active and is relaxing more regulation, but whether it is good enough remains to be seen,” he added.
“The Europe data were rather weak. We think there is still a high chance to have a mild recession in the US and Europe towards the end of the year or beginning of next year.”
Shares in Europe and the US fell on Tuesday over concerns about weak global growth.
The yield on the benchmark US 10-year treasury note rose 9 basis points (bps) to 4.26% after reaching 4.268%, its highest since August 25, while the US dollar rose to a near six-month high against a basket of currencies.
Investors are digesting recent signals on potential US rate hikes. US Federal Reserve governor Christopher Waller said on Tuesday that the latest round of economic data was giving the US central bank space to see if it needs to raise rates again.
“[The] Fed is a focus for us; we think they have more work to do with potential for US rates to continue heading higher,” said John Milroy, investment adviser at Ord Minnett.
US crude was up 0.16% at $86.83 a barrel. Brent gained 0.19% to trade at $91.21 a barrel.
Spot gold fell 0.07% to $1,924.5 an ounce, after reaching its lowest since August 1 on Tuesday.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Asian stocks dive on global growth fears
Amid slowing service sectors and falling manufacturing data, experts warn of a potential recession in Europe and the US
Hong Kong — Asia stocks fell on Wednesday after weak economic data in China and Europe heightened concerns over global growth, while the dollar firmed as investors weighed the outlook for US interest rates.
MSCI’s gauge of Asia-Pacific shares outside Japan was down 0.5% at 1.43am GMT.
Australia’s S&P/ASX 200 fell 0.55% even as second-quarter GDP beat forecasts with a 0.4% rise.
The Hang Seng index and China’s benchmark CSI300 index both opened down about 0.3%.
A private sector survey on Tuesday showed China’s services activity expanded at the slowest pace in eight months in August, reflecting weak demand.
Manufacturing data from Germany, Britain and the euro area also showed declines, while their service sectors fell into contraction.
“The China decline was bigger than expected,” said Redmond Wong, Greater China market strategist at Saxo Markets.
“The Chinese government has become more active and is relaxing more regulation, but whether it is good enough remains to be seen,” he added.
“The Europe data were rather weak. We think there is still a high chance to have a mild recession in the US and Europe towards the end of the year or beginning of next year.”
Shares in Europe and the US fell on Tuesday over concerns about weak global growth.
The yield on the benchmark US 10-year treasury note rose 9 basis points (bps) to 4.26% after reaching 4.268%, its highest since August 25, while the US dollar rose to a near six-month high against a basket of currencies.
Investors are digesting recent signals on potential US rate hikes. US Federal Reserve governor Christopher Waller said on Tuesday that the latest round of economic data was giving the US central bank space to see if it needs to raise rates again.
“[The] Fed is a focus for us; we think they have more work to do with potential for US rates to continue heading higher,” said John Milroy, investment adviser at Ord Minnett.
US crude was up 0.16% at $86.83 a barrel. Brent gained 0.19% to trade at $91.21 a barrel.
Spot gold fell 0.07% to $1,924.5 an ounce, after reaching its lowest since August 1 on Tuesday.
Reuters
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