Wednesday outlook: Asian shares edge lower on signs of slowing global growth

Trade tensions and a slowing global growth weighed on Asian shares on Wednesday. Middle East markets were mostly dragged lower by a drop in oil prices. More commentary on oil prices, currencies and precious metals

  
An investor observes stock market at an exchange hall on March 29, 2016 in Fuyang, Anhui Province of China.

An investor observes stock market at an exchange hall on March 29, 2016 in Fuyang, Anhui Province of China.

Getty Images
  • Asian shares drop on trade tensions, signs of slowing global growth
  • Oil prices weighed on Middle East markets on Tuesday
  • Oil prices steady on Wednesday on worries over global growth
  • Dollar weakens, gold steadies

Global markets

Asian shares dropped again on Wednesday as the International Monetary Fund trimmed its global growth forecasts on Monday and trade tensions between the United States and China weighed on sentiment.

The Financial Times reported that the Trump administration has rejected an offer from China for preparatory trade talks this week ahead of high-level negotiations scheduled for next week, according to a Reuters report.

MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.1 percent lower.

Overnight on Wall Street, the S&P 500, the Nasdaq and the Dow all posted their biggest one-day percentage drops since January 3. The S&P lost 1.42 percent.

U.S. home sales tumbled 6.4 percent in December, falling short of the weakest forecast, to their lowest level in three years. Compared from a year ago, they were down more than 10 percent for the first time since 2011.

Middle East markets

Dubai’s index edged 0.2 percent lower on Tuesday, as Emirates NBD was down 1.7 percent and Emaar Development fell 2.3 percent.

Abu Dhabi's index was mainly flat, with Methaq Takaful Insurance jumping 11.5 percent.

Saudi Arabia’s index was also flat, with Alujain jumping its 10 percent limit.

Qatar’s index edged 0.3 percent lower as Masraf Al Rayan declined 1.4 percent.

Egypt’s blue-chip index EGX30 dropped 0.7 percent, as El Sewedy Electric dropped 2.3 percent and Eastern Co lost 2.4 percent.

Kuwait’s index edged up 0.2 percent, while Oman’s index added 0.1 percent and Bahrain’s index gained 0.2 percent.

Oil prices

Oil prices steadied on Wednesday as concerns over global growth triggered fears over future demand.

International Brent crude oil futures were at $61.49 per barrel at 0314 GMT, virtually unchanged from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $52.98 per barrel, 3 cents below their last settlement.

Chinese finance ministry officials said on Wednesday that the government would step up fiscal spending this year to support its economy.

Steen Jakobsen, chief economist at Denmark’s Saxo Bank, said in a first quarter 2019 outlook that “the global economy is suffering”, but added that China’s government will do all it can for stability, according to a Reuters report.

Currencies

The dollar edged lower after strengthening in the previous sessions, when investors shifted from risky assets.

The dollar index, which measures the greenback against a basket of six major currencies, was a touch lower at 96.30.

Precious metals

Gold prices steadied early on Wednesday.

Spot gold was little changed at $1,284.19 per ounce by 0112 GMT, while U.S. gold futures were also steady at $1,283.40 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


Gain a deeper understanding of financial markets through Thomson Reuters Eikon

Our Standards: The Thomson Reuters Trust Principles

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2019

More From Markets