Risk assets slip on China concerns

Wednesday, March 12, 2014

Wall Street pulled back off recent record levels as concerns regarding the Chinese economy continued to dominate investor sentiment. After rising to record levels last week the S&P 500 closed 0.51% lower as industrials and mining groups gave way. The DJIA also spent most of the session under pressure, losing 0.41% throughout the day as market participants took a step back to re-evaluate the demand outlook.

Asian markets followed the US sentiment lower as Chinese and Japanese stocks struggled to build on the previous session’s gains. Japanese benchmark indices experienced considerable downward pressure with the Nikkei losing 2.59% after opening sharply lower and the TOPIX erasing 2.13% off its value as a stronger yen, pushing back below 103 against the dollar, hit exporters particularly hard. Chinese indices fared slightly better with the CSI 300 adding 0.26% while the Shanghai Composite drifted 0.17% lower in a relatively flat trading session as the government’s crackdown on the shadow banking sector raised fresh credit concerns and fears of a real estate bubble.

The risk off attitude has carried over to the European trading session with most major stock indices opening lower and commodities struggling to hold on to support as risk aversion spreads. Gold prices have managed to breach resistance just above $1,350 this morning and are currently trading towards $1,356/oz as investors seek out safe havens. After a quiet start to the week in terms of economic data, eurozone industrial production later this morning and EIA inventories as well as the Fed budget over in the US later this afternoon will come as a welcome distraction from the weekend’s bearish Chinese trade data and mounting unrest in the Ukraine.

Nikkei index gaps lower on demand growth concerns

NKY Index Nikkei 225 Daily 12 2014 03 12 08 38 44


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Topics: Gold, Equities
More from: Kash Kamal