Markets in Asia continued their respective sell-offs today as the health of banks and yesterday’s oil plunge pushed investors to dump equities. Chris Weston, chief market strategist at Spreadbetter IG mentioned in a note that central banks are in a bid to spike credit growth at the expense of domestic banks, which is turning out to be a negative for equities.
The comment came as both Japan and the Eurozone assured markets that they will embrace negative interest rates, if needed. At the same time, the U.S. Federal Reserve is also finding it hard to hike rates again amidst global uncertainties.
Japan Tests 2014 Lows
Hong Kong’s Hang Seng continued to fall after yesterday’s return to the markets post Chinese New Year. The index lost 1.22% to 18,319.58. Japan’s Nikkei 225 took the steepest beating as it fell 4.84% to 14,952.61 that follows its 7.6% slump this week. Australia’s ASX All Ordinaries closed 1.11% down at 4,816.60.
Fortunately, sentiment around the European markets appeared to be positive today after most of the continent’s markets registered wide losses throughout the week. The early morning key data release by Germany has lent support to the markets. German GDP went up 0.3% in the last quarter of the year, which came in line with the consensus estimates.
Also, the markets appear sanguine over a strong bounce in oil after the United Arab Emirates energy minister stated that OPEC is ready to discuss the oil glut scenario with other oil countries. During the late Asian hours, Brent Crude recovered to $31.58 levels while West Texas Intermediate added up 4.69% to $27.44.
The Euronext 100 and the UK’s FTSE 100 are trading up by 1.68% to 784.41 and 5,629.79. CAC 40 and DAX too gained 1.72% and 1.38% respectively during the early trading hours today. Positive momentum in European markets is catching up even as U.S. markets ended the last session in red.
The Dow Jones Industrial Average lost 1.60% to 15,660.18 while the S&P 500 Index (NYSEARCA:SPY) closed lower at 1,829.08, down by 1.23% and close to key support.