Global markets fall following Wall Street sell-off amid recession fears, with significant drops in Asian stocks and mixed commodity reactions. Critical economic data and central bank actions are closely watched.
Global Markets Overview: Asian stock markets took a hit on Friday, reflecting the fallout from a significant sell-off on Wall Street, driven by mounting recession fears. The Nikkei 225 plunged 5.72%, the Shanghai Composite fell by 0.62%, and the Hang Seng Index dropped 2.39%. Australia’s ASX 200 also saw a decline of 2.18%.
Commodities Update: In commodity markets, gold traded at $2,509.35, up 1.17%, while silver was at $28.98, gaining 1.95%. Brent crude oil and WTI crude oil saw moderate increases, with Brent at $80.13 (up 0.87%) and WTI at $76.99 (up 0.82%).
Interest Rates: In the bond markets, the US 10-year yield was 3.955%, the UK 10-year yield was 3.884%, and Germany’s 10-year yield was 2.228%.
Economic Data: Recent economic data has intensified market anxiety, showing rising unemployment claims and a contraction in manufacturing. US unemployment claims rose to 249,000, surpassing the expected 236,000. The ISM Manufacturing PMI fell to 46.8, below the anticipated 48.8, signaling ongoing contraction in the manufacturing sector.
Global Markets Fall in the Wake of Wall Street Sell-Off
Market Reactions: In Japan, the Nikkei 225 extended its decline from Thursday, hitting its lowest since February before recovering slightly to a 4.56% drop. The Topix Index fell by 4.47%. Significant declines were seen in companies like SoftBank Group, down over 5%, and Tokyo Electron, which lost more than 9%. Meanwhile, Japanese government bond yields fell, with the 10-year JGB yield dipping below 1%.
South Korea’s Kospi Index dropped 3.19%, mainly due to losses in banking stocks, while the Kosdaq plunged 3.46%. Despite the overall negative trend, K-pop stocks like Hybe saw gains after announcing a new business strategy. Australia’s ASX 200 fell 2.18%, retreating from its record highs. Hong Kong’s Hang Seng Index decreased by 2%, and mainland China’s CSI 300 saw a smaller decline of 0.66%. South Korea’s July inflation rate was slightly higher than expected, with a 2.6% increase in the consumer price index compared to the 2.5% forecast.
US Market Impact: The negative sentiment in Asian markets directly resulted from a Wall Street sell-off on Thursday. The Dow Jones Industrial Average fell 1.21%, the S&P 500 lost 1.37%, and the Nasdaq Composite declined 2.3%. The Russell 2000 Index, which had recently rallied, fell 3%. US initial jobless claims saw their most significant increase since August 2023, and the ISM manufacturing index’s contraction at 46.8 added to recession concerns. The 10-year Treasury yield dropped below 4% for the first time since February, reflecting growing economic uncertainty.
Upcoming Events: Investors will be closely watching the following economic indicators due to be released:
- 12:30 PM GMT – USD Average Hourly Earnings m/m
- 12:30 PM GMT – USD Non-Farm Employment Change
- 12:30 PM GMT – USD Unemployment Rate
The global market sentiment remains jittery, with central bank actions and upcoming economic data likely to drive further volatility.
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