Asia report: Markets lose traction after fresh IMF forecasts
Markets in Asia finished in the red on Tuesday, with sentiment taking a dip worldwide after a disappointing outlook on the global economy from the International Monetary Fund overnight.
In Japan, the Nikkei 225 was down 0.47% at 20,622.91, as the yen strengthened 0.21% against the dollar to last trade at JPY 109.44.
The broader Topix index was 0.63% deeper at 1,556.43 in Tokyo.
On the mainland, the Shanghai Composite was 1.18% lower at 2,579.70, and the smaller, technology-heavy Shenzhen Composite lost 1.17% to 1,314.58.
Official data from Beijing on Monday did show that China’s economy grew 6.6% in 2018 - its slowest pace in 28 years - with president Xi Jinping reportedly saying the nation needed to be prepared for “black swan” events, and ready to prevent “grey rhino” situations.
According to CNBC, a ‘black swan’ is an unforeseen circumstance with negative consequences, while a grey rhino is an obvious threat that has been left ignored.
South Korea’s Kospi was off 0.32% at 2,117.77, while the Hang Seng Index in Hong Kong slid 0.7% to 27,005.45.
Overnight on Monday, the IMF lowered its forecast for global growth, warning markets that recent economic momentum was slowing down.
It now predicted a worldwide growth rate of 3.5% for 2019, and 2.6% for 2020 - drops of 0.2 and 0.1 percentage points respectively since its last release in October.
“A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given high levels of public and private debt,” the IMF said in its statement.
Oil prices were lower late into the Asian evening, with Brent crude last down 1.95% at $61.54 per barrel, and West Texas Intermediate losing 2.36% to $52.92.
In Australia, the S&P/ASX 200 lost 0.54% to close at 5,858.80, with the hefty financials subindex taking a 1.18% hit.
Of the region’s big four banks, Australia and New Zealand Banking Group was down 1.45%, Commonwealth Bank of Australia lost 1.19%, National Australia Bank slipped 1.28% and Westpac Banking Corporation slid 1.72%.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.4% at 9,114.63, led lower by former telecoms monopoly Spark, which was off 2.2%.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.34% at AUD 1.4016, and the Kiwi retreating 0.09% to NZD 1.4871.