A sea of red across Asian stock markets today, once again showing how interconnected risk is, particularly as we move into the “scariest” month of all – October! Following last night’s 2-4% losses, most bourses here lost 3-4%+ with Chinese markets the most affected. Currencies were relatively benign with Yen buying abating and the Aussie maintaining just above key support as RBA Governor Lowe talks up a higher USD.
The Shanghai Composite was slammed and fell nearly 5% today, closing at 2591 points in one of it’s worst moves this year, sending it way below key support at 2600. The Hang Seng Index lost nearly 1000 points, down nearly 4% to 25195 points, gapping significantly lower for a new low for the year:
Eurostoxx futures are indicating a big catch up on the open, down nearly 2% with no signs on the four hourly S&P 500 chart that there will be a reprieve tonight. This is way, way overdone, but could fall further if confidence evaporates – so much for efficient markets:
Japanese stocks were hit hard as well, exarcebated by the much stronger Yen with the Nikkei 225 nearly losing 4% to close at 22572 points, immediately pushed below key daily and weekly support and wiping out all of this year’s gains. The USDJPY pair is still falling, but much slower than last night, intent on getting below the 112 handle but it’s hanging on now before the City open:
The ASX200 was the best performer, but that’s all relative, losing 2.7% to close at 5883 points in a big selloff. This takes it well below all its current support levels and ripe for further selloffs as the market overreacts. The Aussie dollar continues is bouncing along a tentative bottom here just above the 70 handle, but internal strength is weak, so I’m not putting much faith on upside here:
The economic calendar gets busy tonight with two key releases to watch out for, first the UK BOE credit condition report, followed by the ECB minutes, but more importantly the US CPI print for September. Another fun and sleepless night to follow!