Huge volatility in Asian markets Australian market recovers some ground

Asian stocks booked some very large losses, extending a two- week rout that has erased $7.8 trillion in global equity values and commodities fell, with oil tumbling below $80 a barrel, on concern the loss of the U.S.’s AAA rating will exacerbate a slowing global recovery. Treasuries, the yen and gold climbed.The MSCI Asia Pacific Index slumped 3.9% by noon in Tokyo.

Almost 20 shares slid for each one that gained on the MSCI Asia Pacific Index, which was set for its longest losing streak since May 2010. The S&P 500 sank 6.7% yesterday to the lowest level since Sept. 10 and the MSCI All-Country World Index fell 5.1%, a ninth day of declines.

Japan’s Nikkei 225 Stock Average slumped 3.3% and Australia’s S&P/ASX 200 Index lost 2.1% but reversed late in the session to pare most losses. South Korea’s Kospi Index plunged as much as 9.9% at one stage and Taiwan’s Taiex Index tumbled 5.4% earlier, driving both gauges down more than 20% from recent highs, the level some investors consider a so-called bear market. Malaysia’s benchmark stock index lost as much as 4.9%, entering a so-called correction after sliding 10% from its record high.

In economic news, consumer prices in China climbed to 6.5% in July from a year earlier, the National Bureau of Statistics said today. The number was slightly ahead of market estimates but not enough to cause panic across markets. Inflation should moderate over the second half of this year as energy prices fall.

In energy markets, oil for September delivery fell 4.6% to US$77.59 a barrel on NYMEX, the lowest level in more than 10 months. The two-day plunge in futures will be the steepest back-to-back loss since January 2009. An Energy Department report tomorrow should show crude inventories climbed for a third week. Brent crude oil plunged as much as 4.8% to US$98.74 a barrel, sliding below the US$100 mark for the first time since early February.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.