Asian Stocks Slumped Driven by Hong Kong Market

Asian Stocks Slumped Driven by Hong Kong Market - Wibest Broker

On Thursday, Asian shares dropped as the Hong Kong market knocked for the second straight session followed by massive street protests. At the same time, the oil prices teased with five-month lows due to higher U.S. crude inventories and a depressing demand outlook.

Aside from that, the loss of faith in the possible secured deal between the United States and China in the upcoming G-20 summit meeting in Osaka, Japan on June 28 and 29 damaged sentiment and led bond yields down.

Daiwa Securities’ chief global strategist Hirokazu Kabeya stated, “There’s not even a plan of ministerial-level bilateral meetings ahead of the G20 summit. You can’t expect any major agreement.”

Elsewhere, the European stocks might decline as futures Britain’s FTSE and Germany’s DAX fell about 0.2%

Also, MSCI’s broadest index of Asia-Pacific shares across Japan was down as much as 1% and was last off 0.6%.

In Asian stocks, the Hang Seng Index of Hong Kong fell 1.8% at one point after Wednesday’s fall of 1.7%.

The legislation which allows citizens to move to China caused a mass protest and some of the worst unrest witnessed in the territory since Britain gave it back to Chinese rule in 1997. After that, the selling pressure in Hong Kong happened.

More on Asian stocks, Japan’s Nikkei tumbled 0.8%. And U.S. stock futures lost 0.2% in the Asian land. Then, it followed slight losses in the previous day when the S&P 500 slipped 0.20%.

Oil Prices

Meanwhile, pressured oil wavered near five-month lows. The hover was due to a surprise increase in U.S. crude stockpiles. Also, the bleaker outlook for demand posed by views of a prolonged trade war between China and the United States.

Also, Brent crude futures slightly changed at $60.06 after a 3.7% shed on Wednesday to $59.97 a barrel. And it is the lowest of oil’s international benchmark since Jan. 28.

The U.S. West Texas Intermediate crude futures stood firm at $51.12 per barrel. In the close of the previous day, it was $50.72 per barrel, its lowest since Jan. 14.

Then, Kabeya also stated, “It is a bit of mystery that oil prices are so low when global stock prices remain relatively supported.”

The chief global strategist added, “But one thing is certain, weaker oil prices will curb inflation and boost rate cut expectations.”

On Wednesday, government data presented consumer prices barely moved in May. And the core annual inflation slowed to 2.0%, compared to its peak of 2.4% last July.  As a result, all of these will add to the increasing expectations of a Federal Reserve interest rate cut in the future.

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