Asia Stocks Tumble as China PMI Hits Six-Year Low; Gold Climbs
2015-08-21 03:40:03.542 GMT
By Adam Haigh and Nick Gentle
(Bloomberg) -- Asian stocks tumbled with U.S. index
futures, extending the worst week for global equities in nine
months, as a gauge of Chinese manufacturing plunged to the
lowest since 2009. Gold extended gains.
Benchmark gauges in Hong Kong, Taiwan and Indonesia headed
for bear markets, dragging down the MSCI Asia Pacific Index by
2.1 percent at 12:36 p.m. in Tokyo. Standard & Poor’s 500 Index
futures dropped 0.3 percent after the gauge fell the most in 18
months. Gold is set for its biggest weekly advance since January
as the selloff in emerging markets spreads. U.S. oil headed for
an eighth straight weekly slide, its longest streak since 1986.
“We’ve been expecting a correction and it looks like we’re
getting one,” said Mark Lister, head of private wealth research
at Craigs Investment Partners Ltd. in Wellington, which manages
about $7.2 billion. “The S&P had held up, now it’s back in
negative territory. The whole world’s looking a little bit sad.
China still looks really worrying on a number of fronts.”
China’s decision to devalue its currency amid slowing
growth and the prospect of higher U.S. interest rates has
spurred a wave of selling across emerging markets and
commodities. The first read on Chinese economic activity in
August added to concern that the slowdown in global growth is
deepening, boosting the appeal of haven assets such as gold and
sovereign bonds.
Oil Drops
The MSCI Asia Pacific Index sank 2.1 percent, with Japan’s
Topix index sliding the most since July 8 and the Kospi gauge in
Seoul set for its worst week since May 2012. The MSCI All-
Country World Index has lost 3.1 percent this week.
Hong Kong’s Hang Seng Index dropped 2.3 percent, taking
declines since an April high beyond 20 percent. Taiwan’s
benchmark gauge dropped 2.4 percent and the Jakarta Composite
Index slid 1.8 percent.
About $2.2 trillion was erased from the value of global
stocks in the first four days of the week. The S&P 500 slipped
out of the 70-point trading range it has been stuck in since
March, falling below 2,040 to as low as 2,035.73 on Thursday. It
closed below its 200-day moving average for the first time since
July 9.
The Federal Reserve’s September rates decision is “only
four weeks away and the world’s looking pretty vulnerable,”
said Stephen Halmarick, Sydney-based head of economic and market
research at Colonial First State Investment Ltd., which oversees
about $150 billion. “If they delay you might see some support
coming through to U.S. markets because then the dollar probably
comes down a bit from where it is now and some of those pressure
points may be relieved, at least in the short term.”
EM Rout
The bloodletting among emerging-market currencies shows no
signs of abating, with a measure of 20 developing economy
currencies set to extend its longest streak of weekly losses
since 2000 after Vietnam and Kazakhstan devalued. The Korean won
weakened 0.7 percent Friday, its fifth drop in six days, while
Malaysia’s ringgit sank 1.3 percent to a new 17-year low.
China’s yuan fell the most in more than a week. The
preliminary Purchasing Managers’ Index from Caixin Media and
Markit Economics was at 47.1 for August. That compared with a
median estimate of 48.2 and the final reading of 47.8 the
previous month. Numbers below 50 indicate contraction.
Redemptions from emerging-market funds picked up in the
week ended Aug. 19, EPFR Global said, citing preliminary data.
Net outflows from bond funds climbed to the highest level since
the first quarter of 2014 and those from equities at a one-month
high. China bond funds had record redemptions
and more than $4 billion was pulled from Asia excluding Japan
stock funds.
West Texas Intermediate crude fell 1.4 percent to $40.76 a
barrel. Copper fell 0.7 percent and is on its way to a seventh
straight weekly loss. The Bloomberg Commodity Index slipped 0.3
percent, taking the week’s loss to 1.5 percent. The gauge has
dropped 13 percent since the end of June and on Wednesday closed
at a 13-year low.
Gold climbed a fifth straight day, while Australian bonds
advanced.
For Related News and Information:
Top Bond Stories: TOP BON <GO>
U.S. Stock Week In Review: TNI USS WIR <GO>
U.S. Stock Greets: TNI USS GREET <GO>
Developed Markets View: DMMV <GO>
World Bond Movers: WBMV <GO>
--With assistance from Emma O’Brien in Wellington.
To contact the reporters on this story:
Adam Haigh in Sydney at +61-2-9777-8635 or
ahaigh1@bloomberg.net;
Nick Gentle in Hong Kong at +852-2977-6545 or
ngentle2@bloomberg.net
To contact the editors responsible for this story:
Michael Patterson at +852-2977-4820 or
mpatterson10@bloomberg.net;
Nick Gentle at +852-2977-6545 or
ngentle2@bloomberg.net
Nick Gentle
2015-08-21 03:40:03.542 GMT
By Adam Haigh and Nick Gentle
(Bloomberg) -- Asian stocks tumbled with U.S. index
futures, extending the worst week for global equities in nine
months, as a gauge of Chinese manufacturing plunged to the
lowest since 2009. Gold extended gains.
Benchmark gauges in Hong Kong, Taiwan and Indonesia headed
for bear markets, dragging down the MSCI Asia Pacific Index by
2.1 percent at 12:36 p.m. in Tokyo. Standard & Poor’s 500 Index
futures dropped 0.3 percent after the gauge fell the most in 18
months. Gold is set for its biggest weekly advance since January
as the selloff in emerging markets spreads. U.S. oil headed for
an eighth straight weekly slide, its longest streak since 1986.
“We’ve been expecting a correction and it looks like we’re
getting one,” said Mark Lister, head of private wealth research
at Craigs Investment Partners Ltd. in Wellington, which manages
about $7.2 billion. “The S&P had held up, now it’s back in
negative territory. The whole world’s looking a little bit sad.
China still looks really worrying on a number of fronts.”
China’s decision to devalue its currency amid slowing
growth and the prospect of higher U.S. interest rates has
spurred a wave of selling across emerging markets and
commodities. The first read on Chinese economic activity in
August added to concern that the slowdown in global growth is
deepening, boosting the appeal of haven assets such as gold and
sovereign bonds.
Oil Drops
The MSCI Asia Pacific Index sank 2.1 percent, with Japan’s
Topix index sliding the most since July 8 and the Kospi gauge in
Seoul set for its worst week since May 2012. The MSCI All-
Country World Index has lost 3.1 percent this week.
Hong Kong’s Hang Seng Index dropped 2.3 percent, taking
declines since an April high beyond 20 percent. Taiwan’s
benchmark gauge dropped 2.4 percent and the Jakarta Composite
Index slid 1.8 percent.
About $2.2 trillion was erased from the value of global
stocks in the first four days of the week. The S&P 500 slipped
out of the 70-point trading range it has been stuck in since
March, falling below 2,040 to as low as 2,035.73 on Thursday. It
closed below its 200-day moving average for the first time since
July 9.
The Federal Reserve’s September rates decision is “only
four weeks away and the world’s looking pretty vulnerable,”
said Stephen Halmarick, Sydney-based head of economic and market
research at Colonial First State Investment Ltd., which oversees
about $150 billion. “If they delay you might see some support
coming through to U.S. markets because then the dollar probably
comes down a bit from where it is now and some of those pressure
points may be relieved, at least in the short term.”
EM Rout
The bloodletting among emerging-market currencies shows no
signs of abating, with a measure of 20 developing economy
currencies set to extend its longest streak of weekly losses
since 2000 after Vietnam and Kazakhstan devalued. The Korean won
weakened 0.7 percent Friday, its fifth drop in six days, while
Malaysia’s ringgit sank 1.3 percent to a new 17-year low.
China’s yuan fell the most in more than a week. The
preliminary Purchasing Managers’ Index from Caixin Media and
Markit Economics was at 47.1 for August. That compared with a
median estimate of 48.2 and the final reading of 47.8 the
previous month. Numbers below 50 indicate contraction.
Redemptions from emerging-market funds picked up in the
week ended Aug. 19, EPFR Global said, citing preliminary data.
Net outflows from bond funds climbed to the highest level since
the first quarter of 2014 and those from equities at a one-month
high. China bond funds had record redemptions
and more than $4 billion was pulled from Asia excluding Japan
stock funds.
West Texas Intermediate crude fell 1.4 percent to $40.76 a
barrel. Copper fell 0.7 percent and is on its way to a seventh
straight weekly loss. The Bloomberg Commodity Index slipped 0.3
percent, taking the week’s loss to 1.5 percent. The gauge has
dropped 13 percent since the end of June and on Wednesday closed
at a 13-year low.
Gold climbed a fifth straight day, while Australian bonds
advanced.
For Related News and Information:
Top Bond Stories: TOP BON <GO>
U.S. Stock Week In Review: TNI USS WIR <GO>
U.S. Stock Greets: TNI USS GREET <GO>
Developed Markets View: DMMV <GO>
World Bond Movers: WBMV <GO>
--With assistance from Emma O’Brien in Wellington.
To contact the reporters on this story:
Adam Haigh in Sydney at +61-2-9777-8635 or
ahaigh1@bloomberg.net;
Nick Gentle in Hong Kong at +852-2977-6545 or
ngentle2@bloomberg.net
To contact the editors responsible for this story:
Michael Patterson at +852-2977-4820 or
mpatterson10@bloomberg.net;
Nick Gentle at +852-2977-6545 or
ngentle2@bloomberg.net
Nick Gentle