The end of the year is the time to gather stones. 2018 was one of the heaviest years in history for the Asian markets. The conflict between the States and China undermined the confidence of the players.
Nevertheless, the last week of the expiring year ended with a slight increase in stock indices in the Asian region. Due to the upcoming negotiations on the trade conflict resolution, positive sentiment appeared in the market.
A dispute with the United States and a slowdown in the economic growth had a negative impact on China
China has experienced the largest drop in the last few years. The index of the Shanghai Stock Exchange has shown a 25% decline in the year. The cost of companies located in China has decreased by 2.4 trillion US dollars. Losses are considered the largest in history. Of course, in 2008 the drop reached 65%, but the amounts were less in absolute terms.
America remains the largest stock market; Japan has taken the second place, while China has ranked third.
A daily trading volume has fallen to its lowest level since 2014 and amounted to approximately $ 54 billion.
A slowdown in the economic growth and a trade dispute with the United States are among the main reasons for the fall. Despite the fact that the country can boast of getting more investments, and state banks have increased their injections into the market, the country hasn’t succeeded in reducing the debt burden.
All industry groups of the CSI 300 index have experienced the fall, which has not been observed for several years.
Hong Kong is also under threat. The local index has collapsed by 15%. It includes Tencent, which capitalization has decreased by a quarter.
Now the exchanges in China and Hong Kong will open on 2 January.
Japan: the first fall in 7 years
Japanese indices show a slight drop. The Nikkei 225 has slipped by 0.3% and Topix- by 0.5%. However, the currency has risen slightly against the dollar and reached 110 yen for $ 1.
The Japanese market has ended the year in the red for the first time since 2011. Topix lost about 20% in 2018 and was being dominated by “bears” for the last 2 weeks. It is noteworthy that in January, the index showed a record growth and reached a maximum in the last 27 years.
Nikkei 225 has slipped by 12% over the year.
After publicizing the minutes of the Japanese Central Bank meeting, it turned out that the management was discussing high risks and the level of inflation.
Industry in Japan fell by only 1.1% in November. This figure was below expectations (1.9%). The production growth has amounted to 0.7% over the year.
In November, a retail trade showed the growth below expectations and increased only by 1.4% compared to the same period last year.
Also, the unemployment slightly rose (by 0.1%) in November. Analysts believed that there would not be any changes.
The Japanese stock exchanges will remain closed until January 3.
South East Asia did not speak with one voice
Sensex (India) has climbed by 6%. This is a small figure, but compared to other markets, this growth can be considered a success.
A growth was also recorded in New Zealand (3.5%). Most markets are in decline. So KOSPI (South Korea) has fallen by 17%; S & P / ASX 200 (Australia) – by 7% and Jakarta Composite (Indonesia) – by 2.5%.
The Philippines has shown the worst result- minus 13%.
What should Asian markets expect from the coming year?
Experts say that positive developments in the Asian markets will begin as early as the beginning of 2019. However, negotiations between the United States and China may delay this process.
Standard Chartered strategist Manpreet Gill believes that one should count on a greater volatility and withdraw money from assets. Morgan Stanley is of the opinion that the next year will be in a bullish trend for Asia.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade