Shares in Australia fell by their sharpest in more than a week and led most Asian markets lower on Monday, as anxiety about the pace of global growth sent investors fleeing to safer assets, including the U.S. dollar.
Japanese markets were shuttered for holiday
In Hong Kong, the Hang Seng Index removed 163.9 points, or 0.8%, to 21,756.93,
Australia’s mining and energy shares were caught up in the global-growth worries, at a time when several of Australia’s biggest commodity exports have excess supplies. Banking stocks were also down steeply in a broad selloff, as threats to the local economy, including the property market, appeared to weigh on the minds of investors
The Wall Street Journal Dollar Index, which gauges the U.S. currency against a basket of 16 currencies, was up 0.4% compared with late Friday in Asia. It earlier hit multi-week lows in the wake of the U.S. Federal Reserve’s decision to keep interest rates on hold. Lower rates for a longer time are a drag on the dollar, as they make the currency less attractive to investors seeking yield.
The Fed’s decision to keep rates steady on Thursday in part reflects concern about slowing growth in China and other emerging markets—concerns exacerbated last month by Beijing’s currency devaluation, which set off wild market swings. U.S. stocks tumbled Friday to their biggest one-day loss in two weeks.
The European Central Bank’s chief economist weighed in on the Fed’s worries about the global economy Saturday, saying the ECB is ready to expand stimulus measures if needed to ensure that inflation returns to the bank’s target of near 2%.
The re-election of Alexis Tsipras as Greek prime minister is expected to reassure financial markets, as well as officials in Europe, that Greece will stick to its bailout commitments and enter a period of greater political calm. But, the outcome of the vote, announced Sunday, puts Tsipras in place to carry out the very kind of harsh austerity that he was previously elected to resist.
The return of weakness in Asia comes after both Hong Kong and Australia notched their second consecutive week of gains last week.
CHINA
The CSI 300 in Shanghai grew 56.97 points, or 1.8%, to 3,308.25
One potential market mover this week, experts said, is the reading on Chinese manufacturing activity for the month of September, due Wednesday from Caixin Media Co. and research firm Markit Ltd. The August reading was the lowest in more than six years.
Another measure, from China Beige Book International, showed manufacturing putting in its most sluggish performance in two years during the July-September quarter, although services remained strong. And while China exports were weaker, they were a less significant driver of overall growth, the group said. The results are based on a survey of more than 2,100 businesses.
Its gains came late within the last hour of trade, a frequent buying-window for Beijing-backed funds to support the market.
The Shanghai benchmark shed 3.2% last week, as brokers cited investor nervousness about the Fed’s decision and some weakness in economic data.
In other markets
In Korea, the Kospi index slid 31.27 points, or 1.6%, to 1,964.68
In Singapore, the Straits Times Index eked up 2.68 points, or 0.1%, to 2,882.27
In Taiwan, the Taiex index plummeted 155.1 points, or 1.8%, to 8,307.04
The NZX 50 dropped 28.52 points, or 0.5%, to 5,683.52
The ASX 200 Index retreated 104.26 points, or 2%, to 5,066.25
