Asia stocks mixed after IMF slashes 2019 surge outlook again
Asian stocks were mixed in Wednesday afternoon trade amid fresh worries over the outlook for the global economy.
Mainland Chinese stocks declined by the morning session’s end, with the Shanghai composite falling 0.39 percent and the Shenzhen component slipping about 0.27 percent. The Shenzhen composite also saw losses of 0.291 percent.
In Japan, the Nikkei 225 declined 0.67 percent in afternoon trade as shares of index heavyweight Fanuc fell about 0.6 percent. The Topix index also fell 0.79 percent.
South Korea’s Kospi, however, recovered from its earlier slip to trade fractionally higher as chipmaker SK Hynix saw its stock gain around 0.4 percent.
Over in Australia, the ASX 200 was slightly higher, after the country’s central bank deputy governor said in a speech that it was attempting to ascertain the appropriate policy path amid “conflicting signals ” from the labor market, GDP data and business surveys.
“A critical question is which of these is providing the best signal of the global growth impulse? Is it GDP or the labour market? How can we reconcile the difference?” said Reserve Bank of Australia Deputy Governor Guy Debelle, according to a transcript of his speech.
The Australian dollar changed hands at $0.7135 after touching an earlier low of $0.7107.
Meanwhile, shares of Crown Resorts fell more than 8 percent after Wynn Resorts terminated discussions with the Australian gaming firm after the deal talks were leaked.
The International Monetary Fund slashed its global economic growth forecast once again on Tuesday, and said it expects the world economy to grow by 3.3 percent this year. That’s down from its previous outlook of 3.5 percent, which was also a downgrade. The IMF added that it expects the economy to expand by 3.6 percent in 2020, however.
“Higher trade policy uncertainty and concerns of escalation and retaliation would reduce business investment, disrupt supply chains, and slow productivity growth,” said the IMF. “The resulting depressed outlook for corporate profitability could dent financial market sentiment and further dampen growth.”
“Global risk sentiments are likely to take a backseat today after the IMF shaved its 2019 global growth forecast again from 3.5% to 3.3% (lowest since 2009),” analysts at OCBC Treasury Research said in a morning note.
Overnight on Wall Street, the Dow Jones Industrial Average and S&P 500 both posted their worst session since March 22, while the Nasdaq Composite notched its largest drop since March 27.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.014 after touching an earlier low of 96.989.
The Japanese yen traded at 111.14 against the dollar after touching an earlier high of 111.05.
International benchmark Brent crude futures declined slightly to $70.59 per barrel and U.S. crude futures rose 0.16 percent to $64.08 per barrel, in Asian afternoon trade.
Source: CNBC
