World Economy
0

Asian, European Stocks Low

Asian, European Stocks LowAsian, European Stocks Low

Asian stocks fell as the region’s equity markets began trading for the first time since attacks in Paris killed least 129 people. European Stocks also fell as markets reopened on Monday.

The MSCI Asia Pacific Index declined 0.6% to 131.47 in Tokyo, with more than 20 shares dropping for each that rose. E-mini futures on the Standard & Poor’s 500 Index lost 0.6%, while Japan’s Topix index slumped 1.5% as the yen gained and data showed the nation fell back into recession. Investors are assessing the impact of the Paris attacks on Europe’s economy at a time when global output is already weakening.

“There is no doubt that the attacks in Paris will contribute to short-term investor nervousness,” said Shane Oliver, Sydney-based strategist at AMP Capital Investors Ltd., which oversees about $110 billion. Markets in the past decade have rebounded from terrorist attacks after an initial negative impact on stock markets, as it becomes clear there will not be a major economic impact, he said. “I think history will repeat itself. It will just be a short selloff in response to the Paris attacks.”

Australia’s S&P/ASX 200 Index slid 0.8% and New Zealand’s NZX 50 Index fell 0.7%. South Korea’s Kospi index retreated 1.4%.

In China, IMF staff recommended the yuan be added to the organization’s Special Drawing Rights, a move Standard Chartered Plc estimates will lure more than $1 trillion to the nation’s assets in the next five years.

The country’s two mainland stock exchanges said late Friday margin requirements will be raised to 100% from 50% starting Nov. 23. The rule change means that investors with 1 million yuan ($156,895) in their account are limited to borrowing another 1 million yuan from a broker to buy more shares. Previously, they could borrow as much as 2 million yuan. A Bloomberg index of American depositary receipts on Chinese stocks declined 4.2% in New York on Friday, the most since Aug. 24.

French stocks fell with European equities as the market reopened after Paris suffered the worst terror attacks in Europe’s history in more than a decade.

The CAC 40 Index lost 0.9% in Paris. The Stoxx Europe 600 Index declined 0.6%. The Stoxx 600 lost 2.7% last week, the most since the beginning of September, amid worse-than-forecast data on eurozone growth. The CAC 40 declined almost 9% since April, though it was still among the best performers in developed markets for the year as of Friday.

Investors sought haven assets Monday, sending French government bonds higher along with US Treasuries. Yet the history of terror incidents around the world over the last 15 years shows market reactions are often sharp and, increasingly, short-lived.

 

Financialtribune.com