Friday was still markedly turbulent for world markets as economic news focused of the slide on Asian shares to 20-month lows. Meanwhile, S&P futures fell steeply and China’s yuan weakened. Anticipation for corporate profits also added to the lingering fears toward global trade and economic growth.
In a sign of shaky investor confidence, the gloom blanketing Asia came in with high contrast with Wall Street’s overnight bounce, with shares of e-commerce giant Amazon.com Inc and Alphabet Inc sliding steeply after the closing bell on disappointing earnings.
During Friday’s Asian trading session, S&P e-mini futures slipped 0.88 percent, paving the way for likely bumpy session for US markets, which had been shaken on Wednesday over worries about earnings. This sent world equities tumbling.
MSCI’s broadest index of Asia-Pacific shares ex-Japan slipped 1.04 percent, wiping off tiny gains fetched in the opening hour and reaching its lowest level since February 2017. Another bad news was China’s yuan’s slip past a key level, refocusing the attention of the market on sluggish growth in the world’s second largest economy.
Shares in Europe are expected to slip as well, with London’s FTSE expected to start trading 0.9 percent lower. Germany’s DAX is expected to start 0.1 percent lower, while France’s CAC 40 is seen to kick off the session with a 1.2 percent decrease, according to David Madden, who is a market analyst at CMC Markets UK.
“There’s no question that the weight of sentiment has been building,” said Brisbane-based, Argonaut corporate stockbroking director James McGlew. He stressed in particular the increasing geopolitical tensions such as Brexit and “internal financial tension” in China.
“All of these things added up to the volatility hitting a boiling point… and I don’t think at the moment people should be trying to catch the falling knife,” he added.
The MSCI Asia index has been bruised by a heavy sell-off in the past several days. it was also headed for its fifth weekly loss, the longest losing streak it had since 2015. It also has plummeted more than 4 percent this week.
China shares were pulled lower in the middle of the generally gloomy mood. The yuan has slipped past the psychologically important 6.96 level against the US dollar, hitting its rock-bottom levels against the Us currency since December 2016.
The blue-chip index was down 0.9 percent and the Shanghai Composite was 0.51 percent lower during the afternoon trade.
Chinese shares have been impacted by volatility this week amid a series of financial announcements and measures that were meant to support the markets following a recent slide. The heavy selloff has raised concerns about risks posed by nearly $620 billion worth of shares pledged for loans.
Meanwhile, Hong Kong’s Hang Seng index was 1.5 percent lower, with tech shares plunging 2.94 percent.
The same is true in South Korea, where tech firms also slipping and the broader market shedding 1.8 percent. The Kospi had earlier reached its lowest level since December 2016.
In Australia, shares finished flat at the end of a volatile trading session. Japan’s Nikkei stock index finished 0.4 percent lower after a turbulent day, ending the week down 5.98 percent.