· Asian shares slipped from eight-month highs on Wednesday as the International Monetary Fund lowered its global growth outlook and as the United States and Europe locked horns over tariffs in a fresh escalation of trade tensions.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.1 percent, a day after it hit its highest since Aug. 1.
· Japan’s Nikkei dropped to a one-week low on Wednesday as escalating trade tensions between the United States and Europe and worries about the global growth outlook sapped investor confidence.
The Nikkei share average ended 0.5 percent lower at 21,687.57, the lowest closing level since April 3.
· U.S. President Donald Trump said he would impose tariffs on $11 billion of European goods, raising fears that differences over aircraft subsidies could morph into a wider trade war.
Not helping the mood, the International Monetary Fund cut its global economic growth forecast and said a sharp downturn could require world leaders to coordinate stimulus measures.
· Chinese stocks recouped earlier losses to end higher on Wednesday, boosted by strength in consumer and healthcare companies.
The blue-chip CSI300 index rose 0.3 percent, to 4,085.85, while the Shanghai Composite Index closed up 0.1 percent at 3,241.93 points.
The global economy is slowing more than expected and a sharp downturn could require world leaders to coordinate stimulus measures, the International Monetary Fund said on Tuesday as it cut its forecast for world economic growth this year.
Sector performance was mixed for the day, with gains in consumer and healthcare firms offsetting losses in other sectors.
· European stocks opened slightly higher Wednesday morning, with EU leaders likely to grant British Prime Minister Theresa May a second delay to Brexit.
The pan-European Stoxx 600 was up around 0.1 percent shortly after the opening bell, with most sectors and major bourses in positive territory.
Market focus is largely to attuned to global trade developments, after the U.S. and Europe locked horns over tariffs in the previous session.
· President Donald Trump threatened to impose charges on $11 billion worth of European Union products on Tuesday, escalating tensions in a long-running transatlantic aircraft subsidy dispute.
Global economic growth was another sore point for risk asset markets. The International Monetary Fund (IMF) cut its forecast for world economic growth this year, saying a slowdown could force world leaders to coordinate stimulus measures.
· Despite fears of slowing growth globally, companies seem set for a relatively strong performance this year — especially in Asia, according to one expert.
That is, guidance from companies on their expected earnings for this year have been “pretty good,” said Ken Wong, Asia equity portfolio specialist at asset management firm Eastspring Investments.
“Despite all this talk (about the) trade war slowing down economic growth, companies are still seeing a fairly decent amount of earnings growth expectations for 2019,” he told CNBC’s “Street Signs” on Tuesday.
Although the Fed isn’t projecting any new 2019 rate increases at the moment, Wong said a decision from the central bank to hike would be an opportunity for investors to capitalize on any stock market correction.
“If markets do correct ... that’s a perfect opportunity to start gradually accumulating shares as well. Because yes, we still have a bit of a short-term impact on share prices,” he said. “But then again, because we’ve seen how ... earnings are actually still fairly solid especially in this part of the world.”
Reference: CNBC
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