Asian shares tumbled to 20-month lows and S&P futures fell sharply at the end of a turbulent week for financial markets on Friday, as anxiety over the outlook for U.S. corporate profits added to lingering fears about global trade and economic growth.
The losses came despite a bounce on Wall Street overnight, highlighting fragile investor confidence, as shares of tech titans Amazon.com Inc and Alphabet Inc fell sharply after the closing bell on disappointing earnings.
In Friday’s Asian session, S&P E-mini futures slumped 0.66 percent, setting up a potentially rough session for U.S. markets which had crumbled on Wednesday on concerns about earnings and sent global equities into a tailspin.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1 percent, erasing tiny gains made in the opening hour and hitting its lowest level since February 2017. Not helping was a slide in the Chinese yuan past a key level, refocusing market attention on slowing growth in the world’s second-biggest economy.
“There’s no question that the weight of sentiment has been building,” said James McGlew, executive director of corporate stockbroking at Argonaut in Brisbane, highlighting in particular rising geopolitical tensions including Brexit, and “internal financial tension” in China.
“All of these things added up to the volatility hitting a boiling point… and I don’t’ think at the moment people should be trying to catch the falling knife,” he said.
The MSCI Asia index has been bruised by a heavy sell-off in the past several days, and is on course for its fifth weekly loss – its longest such streak since 2015. It has fallen more than 4 percent this week.
Chinese shares were pulled lower amid the generally dismal mood, and as the yuan fell past the psychologically important 6.96 level to the dollar, touching its lowest levels against the greenback since January 2017.
The blue-chip index was down 1 percent and the Shanghai Composite was 0.53 percent lower in early afternoon trade.
Chinese shares have been hit by volatility this week amid a string of official announcements and measures aimed at supporting the markets following a recent plunge. The heavy sell-off has raised concerns about risks posed by about $620 billion worth of shares pledged for loans.
In Hong Kong, the Hang Seng index was 1.05 percent lower, with tech shares dropping 2.72 percent.
Tech firms also fell in South Korea, where the broader market slid 1.62 percent, deepening losses after the Kospi closed at its lowest level since January 2017 on Thursday.
In Australia, shares turned down 0.4 percent after gaining modestly at the start. But Japan’s Nikkei stock index was shaken by a volatile session, spending much of the morning in the red and last trading flat after tumbling 3.7 percent on Thursday.
Financial markets have been whipsawed in recent sessions on concerns over global growth as investors fretted over Sino-U.S. trade frictions, a mixed bag of U.S. corporate earnings, Federal Reserve rate hikes and Italian budget woes. A slowdown in China has been particularly worrying for policy makers and investors, hitting asset markets from stocks to currencies and commodities.
Analysts at Capital Economics sounded a cautious note, suggesting that the bounce in the S&P 500 index on Thursday was only temporary as investors worries about the economic outlook worsen.
“The first, and most important (worry) is that Fed tightening and fading fiscal stimulus will cause the US economy to take a turn for the worse … The second is that China’s economy will continue to struggle,” the analysts said in a note to clients.
“As we have been arguing for a while now, these worries are likely to get worse over the next twelve months or so.”
Investors will get a chance to check the U.S. economic pulse later Friday when the government releases third-quarter GDP data.
ANZ analysts highlighted weak U.S. core durable goods data as suggesting that “investment is not taking off, even with the apparent tailwind from tax cuts and USD repatriation.”
“This indicates that the boost to GDP growth from the fiscal stimulus could be fairly transitory,” the analysts said.
DRAGHI COMMENTS HIT EURO
In currency markets, the euro fell, extending weakness after European Central Bank President Mario Draghi said the bank’s 2.6 trillion euro ($2.96 trillion) asset purchase program will end this year and interest rates could rise after next summer, despite fears about the monetary union’s economic and political future.
The single currency was 0.1 percent lower at $1.1362.
The dollar was off 0.21 percent against the yen at 112.16. The dollar index, which tracks the greenback against a basket of six major rivals, was 0.04 percent lower at 96.644.
U.S. Treasury yields rose as equity markets plunged. The 10-year yield fell to 3.1056 percent compared with its U.S. close of 3.136 percent on Thursday.
Oil prices gave up ground, heading for their third weekly loss after earlier rising on signals from Saudi Arabia’s energy minister that there could be a need for intervention to reduce oil stockpiles.
U.S. crude dipped 0.85 percent to $66.76 a barrel. Brent crude fell 0.62 percent to $76.41 per barrel.
Spot gold ticked up to $1,231.92 per ounce.
UN Says 10 Children Among 13 Killed By US Air Strike In Afghanistan
The United Nations has on Monday confirmed that ten children, part of the same extended family, were killed by a US air strike in Afghanistan, along with three adult civilians.
The deadly attack occurred early Saturday near the capital city of volatile Kunduz province a northern province where the Taliban is strong where Afghan and U.S. forces were conducting a joint operation against Taliban insurgents.
Sgt. Debra Richardson, spokeswoman for the NATO-led Resolute Support mission in Afghanistan, confirmed on Sunday that US forces carried out the air strike. She said the mission aims to prevent civilian casualties, while the Taliban intentionally hides among civilians.
The UN Assistance Mission in Afghanistan (UNAMA) said in releasing its preliminary findings about the incident. UNAMA said in a statement that it is verifying that all 13 civilian casualties occurred around the time of the air strike.
U.S. officials confirmed the killing of two service members and carrying out an airstrike in the area, accusing the Taliban of using civilian areas as hideouts.
The strike which happened between late Friday and early Saturday is to support the pro-government forces on ground fighting against the Taliban militants in the area. The ensuing clashes have killed two American soldiers and several local commando forces, prompting the U.S. military to launch the airstrike
Seven Wounded As Gaza Rocket Strikes Home In Central Israel
Seven people were wounded early Monday morning after a rocket allegedly fired from Gaza Strip stuck a house in central Israel prompting Prime Minister Benjamin Netanyahu to cut short his visit to Washington and return to Israel after his meeting with President Donald Trump.
The Israel Defense Forces said that the rocket, which struck a home in the community of Mishmeret, was fired from a Hamas position in the area of Rafah in the southern Strip, some 120 kilometers from where it struck. It said the rocket was manufactured by the group.
Israel’s ambulance service said it treated seven people overall, including two women who were moderately wounded. The others, including two children and an infant, had minor wounds.
Israel has also closed the Erez and Kerem Shalom border crossings into the Strip.
Netanyahu said that Israel “will respond forcefully” to the rocket fire and that he was returning “to manage our operations up close.”
Teacher From Remote Kenya Village Is World’s Best, Wins $1 Million
A maths and physics teacher from rural Kenya who donates most of his salary to help poorer students has won the $1m Global Teacher Prize for 2019 beating 10,000 nominations from 179 countries.
36-year-old, Peter Tabichi, a science teacher at Keriko secondary school in Pwani Village, in a remote village in Kenya’s Rift Valley, Tabichi, a member of the Franciscan religious order, who gives away 80 percent of his salary to support poor students, received the prize at a ceremony on Saturday in Dubai, hosted by Hollywood actor Hugh Jackman.
“Every day in Africa we turn a new page and a new chapter, this prize does not recognise me but recognises this great continent’s young people. I am only here because of what my students have achieved,” Tabichi said.
In a society where drug abuse, teenage pregnancies, dropping out early from school, young marriages and suicide are common while over 90% of his pupils are from poor families and almost a third are orphans or have only one parent, students have to walk 7km along roads that can become impassable in the rainy season to reach the school.
- UN Says 10 Children Among 13 Killed By US Air Strike In Afghanistan March 25, 2019
- Seven Wounded As Gaza Rocket Strikes Home In Central Israel March 25, 2019
- Appeal Court Cancels Zamfara APC Primaries For Gov, Assembly Elections March 25, 2019
- Morocco: Teachers Protest Over Poor Working Conditions March 25, 2019
- Cyclone Idai: Cases Of Cholera Reported In Storm-Hit Areas March 25, 2019
African News4 days ago
Equatorial Guinea, Rights Group Express Dismay Over Switzerland’s Decision To Return Seized Yacht
African News6 days ago
Cameroon Protests US Interference During Nagy Visit
World News7 days ago
UPDATES: Dutch Police Arrest Suspect In Deadly Tram Shooting
African News5 days ago
Five Miners Shot In Ethiopia, Including Two Foreigners Says TV
African News5 days ago
UAE, Sweden Pledge Emergency Aid To Cyclone Idai Affected Countries
African News6 days ago
Roadside Bombs Kill Five Burkina Faso Security Forces
African News4 days ago
Somalia Panics Over Abandoned Military Base By Kenyan Forces
Sports News7 days ago
European Clubs May Boycott FIFA’s Club World Cup After Proposed 24-Team Expansion