‘Tsunami of Risk Aversion’ Ripples Through Asian Stock Markets (Bloomberg News – August 6, 2019)


Asian stock investors woke up to another day of market slumps after salvos from the U.S. and China in their ongoing trade war. Declines were tempered by mid-morning after China set its yuan reference rate stronger than analysts expected.

China’s shock and awe tactics had left investors reeling, sending a “tsunami of risk aversion across global markets,” said Stephen Innes, a managing partner at Vanguard Markets Pte. in Singapore.

China’s Tuesday yuan fixing is “ambiguous enough to keep two-sided interest alive while still conveying a message to U.S. trade hawks that in no uncertain terms will China be a pushover if trade talks ever resume,” he said.

Asian stock markets saw a sea of red, with Japan’s Topix index down 1.9% at the morning break. U.S. stock-index futures fell as much as 1.9% before narrowing losses to 0.7%.

Yesterday, the S&P 500 Index tumbled 3% after China allowed its currency to fall in retaliation for new U.S. tariffs, prompting the Trump administration to officially call China a currency manipulator. Today China set its yuan fixing stronger than 7 against the U.S. dollar.

For the rest of this article: https://www.bloomberg.com/news/articles/2019-08-06/-tsunami-of-risk-aversion-ripples-through-asian-stock-markets

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