After beginning the week on a positive note, Asian markets pared gains today on the back of weakness in oil prices and an increased appetite for Japanese yen. Though Japanese and Australian indices opened in green their momentum was short-lived as the People’s Bank of China set the reference rate for yuan to a level lowest since the first week of January.
Rally fizzles out
The move dampened the overall sentiment, sending Asian indices to red. China’s Shanghai SE Composite Index fell 0.81% to 2,903.33 and Hang Seng ended the day 49.31 points down to 19,414.78. Australia ASX All Ordinaries shed 0.35% to 5,039.10 while Nikkei slumped 0.37% to 16,052.05. India’s Mumbai Sensex was seen trading relatively lower at 23.430.74, which implied 1.51% drop for the day. Taiwan TSEC finished the day 0.10% higher at 8,334.64.
German confidence dips again
The early trading hours in Europe were no different than Asia as the major indices returned into red following a solid rally a day earlier. Also, the latest economic data from Germany was disheartening and gave a reason for the markets to open lower. According to the Federal Statistical Office, German exports contracted by 0.6% during the last quarter of 2015, implying that the region ended the year on a weak note. Moreover, the decline is the first occurrence in the last three years, which is concerning for analysts. The imports of the region grew by 0.5%, underlining the fact that the economy was steered by public and private consumption.
Over and above this, the business confidence in Germany deteriorated again, taking the index to a one-year low. IFO’s business sentiment index fell to 105.7 from 107.3 in January, a pace considered as the fastest in four years. During the early hours, FTSE 100 fell 0.69% to 5,995.88, and Euronext 100 slid 0.11% to 843.40. France’s CAC 40 and Germany’s DAX posted a fall of 0.07% and 0.94% respectively. Swiss Market Index dipped 0.88% to 7,891.54.
The weakness across the global bourses came even as the U.S. markets finished the previous session on a higher note. Dow Jones Industrial Average closed the last session up by 1.40% to 16.620.66.