LAST_UPDATEWed, 20 Jun 2018 10am

Asian Shares Lingers As Slow Global Growth Continues To Worry Traders

Pic: www.dawn.comPic: www.dawn.comTOKYO: Lingering concerns over global growth kept Asian stocks on a tentative footing today, with more signs of gloom in the euro zone economy helping underpin the dollar.

The dollar extended gains after disappointing data out of Germany and Britain checked the euro’s recent bounce.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.08 per cent, but still not too far off a seven-month low hit at the start of the week.

Tokyo’s Nikkei climbed 0.4 per cent after touching a two-month trough yesterday.

Concerns over faltering global growth triggered a bruising selloff in global equity markets in the past week, and investors remain reluctant to buy into riskier assets as the drumbeat of weak data showed no signs of abating.

Overnight, a closely watched ZEW survey showed German analyst and investor morale fell below zero for the first time in nearly two years in October.

Adding to the gloom, the German government cut its growth forecasts, euro zone industrial production fell, British inflation slowed sharply in September and Fitch warned it may cut France’s credit rating.

“Risk-off tone continues to dominate the markets as US equities pared most of the gains while Treasuries remain in demand,” Credit Argricole said in a note to clients.

US Treasuries and German Bunds have rallied this week, with the yields on the latter hitting record lows yesterday after data reinforced fears the euro zone may be slipping into recession.

Wall Street put up a mixed performance overnight, reflecting the cautious mood in markets. The S&P 500 and Nasdaq booked modest gains to break a three-day string of sharp declines, but the Dow finished down for a fourth day.

The focus in markets is now on Chinese inflation-related data due at 9.30am EDT with weaker-than-expected numbers potentially souring still fragile sentiment toward risk assets.

The dollar index, a gauge of the greenback’s strength against a basket of major currencies, was up 0.1 per cent at 85.941 as the downbeat data took a toll on the euro.

The dollar was up 0.3 per cent at 107.33 yen, having pulled back from a one-month low of 106.68 hit the previous day.

The euro traded little changed at US$1.2644 (RM4.13).

In commodities, US crude bounced slightly after posting its biggest per centage loss in about two years overnight on a downgrade in global oil consumption forecasts, projections for another big boost in shale oil and reluctance by OPEC members to cut output.

US crude was up 44 cents at US$82.28 a barrel, although mounting evidence of slackening demand and unrelenting US shale output are expected to keep applying downward pressure on the commodity in the mid- to long-term.

— Reuters