Asian stock markets were mixed at the end of trading on Tuesday after some of them failed to hold together following a down session in global stock markets yesterday, while European stock markets continued to decline amid fears of an economic contraction in the United States.
Stock market indices declined yesterday in all major financial markets around the world, starting with a sharp decline in Tokyo, while the New York Stock Exchange – which is an indicator for all financial markets – closed with a sharp decline, as two of the three main indices experienced their worst session in two years.
But Deutsche Bank analysts said there was a “change in direction on Tuesday” in financial markets.
Markets are relatively calm after Friday’s concerns over a disappointing US jobs report.
Stock exchange performance
Asian stock exchanges
- Japan’s Nikkei index rose 10.23% to 34,675 points.
- China’s Shanghai Composite Index rose 0.23% to 2,867 points.
- Hong Kong’s Hang Seng Index fell 0.31% to 16,647 points.
- India’s Sensex fell 0.21% to 78,593 points.
- The Singapore index fell 1.39% to 3,198 points.
European stock exchanges
- The UK’s FTSE 100 index fell 0.32% to 7,982 points, at the time of writing.
- The German DAX index fell 0.12% to 17,317 points.
- The French CAC index fell 0.62% to 7,104 points.
- The Stoxx 600 Composite Index fell 0.15% to 486 points.
Faced with higher than expected unemployment and fewer jobs created than expected, markets feared this was a sign of a major economic slowdown in the United States as a result of the Federal Reserve’s monetary policy.
The Federal Reserve raised key interest rates to their highest levels in 20 years with the aim of curbing the US economy and reducing inflation to 2% after it reached 9.5% at an annual rate in June 2022, its highest levels in 40 years.
With investors anticipating a first rate cut, markets fear the Federal Reserve has waited too long to act, risking a U.S. recession.
change of direction
Deutsche Bank analysts said Tuesday’s “change in direction” of markets “appears to coincide with comments from Chicago Fed President Austin Goolsbee, who told CNBC the day before that the jobs data “doesn’t currently look like a contraction” and that the Fed “can wait for other data before the September meeting.”
They also pointed out that activity in the services sector in the United States returned to growth last July, according to an index released on Monday, considering that this data “may have also contributed to convincing the markets that the jobs report is not as bad as they thought.”
