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Declines in market indices started from Wall Street, followed by Asia

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Declines in market indices started from Wall Street, followed by Asia
May 03
09:00 2018

After the Federal Reserve of the USA had confirmed its plans to gradually increase rates against the background of strengthening inflation, Asian stock markets closed on Thursday with negative dynamics.

The fall of the market indices on Wall Street had a significant impact on the Asia-Pacific region. Against the background of the decline in bank shares and the Hang Seng index (HSI) in Hong Kong (dropped by 1.3%), the main price indicator of the Stock Exchange of Singapore fell by 1.1%.

Eugene Leow, a securities expert at DBS, said that the Fed could allow inflation to exceed its target interest rate of 2%. The crossing of this level should not be considered as an attempt by the central bank to accelerate the growth of interest rates.

Talks about new US sanctions against Chinese telecommunications equipment manufacturers brought down ZTE shares by 1.92%. The company Huawei Technologies also suffered because of the talks. Hayman Chiu, Director of Research at Cinda International, expressed his concern about the weakening of the Hong Kong dollar against the US dollar and an outflow of funds. The decline in shares of developers by about 3% has become the result of the current situation. Meanwhile, Taiwan indexes Taiex and Hon Hai have fallen by 1% and 2.08% respectively.

The MSCI Asia Pacific ex-Japan index has fallen by 0.5%. Japanese markets closed for a four-day holiday weekend and will resume their work next week.

Australian indices S&P and ASX 200 XJO continued to grow in the commodity sector and have risen by 0.8%.

The Hang Seng index in Hong Kong has fallen by 2%.

Investors in Indonesia are feeling down. The rupee has fallen to a two-year low. “The weakening of the rupee continues to worsen the mood among investors,” said John Teja, director at PT Ciptadana Sekuritas Asia.

“Who wants to buy shares in the country where the currency has been weakening?”, Said Stephen Innes, head of trading for Asia-Pacific at Oanda Corp. He continued: “We seem to be moving from the global growth, which was observed a few weeks ago, to a synchronous global recession.”

The quarterly report of the company InterGlobe Aviation Ltd., which owns the largest Indian airline IndiGo, was worse than the market expected and the price of its shares collapsed by 10%.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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