Week In Review – Global Markets decline further
by PIAS Product Strategy Team
Global Markets decline over concerns on China and weak U.S data
The stock market’s rough start to the year continued as global markets traded negatively on the last Friday. Concerns continue to revolve around the slowdown of the Chinese economy growth, the unstable Chinese stock market and recent weak data on the industrial production in the United States. Oil prices have dropped sharply, falling below $30 per barrel.
Asian stock markets fell sharply last week on heightened risk aversion on the back of lingering concerns about the Chinese economy. The Shanghai Composite Index has dropped 20% from its December high. Japanese stocks fell on concerns about China and selling by foreign investors, with other Asian markets weakening. Hong Kong’s Hang Seng Index (-4.6%) and Singapore’s FTSE Straits Times Index (-4.4%) also sold off sharply.
Among emerging countries outside of China, the commodities-linked markets of Russia and Brazil suffered some of the greatest losses. European stocks followed the same path as other global markets, pulled down by oil, China and economic concerns.
News and data coming out of China will continue to hog the headlines. Although markets have been volatile but we should not be over worried. The global economy is expected to continue to grow modestly over time as corporate profits should rebound if oil prices and the dollar stabilize over 2016.