Asian Stock Market: Braces for the worst month since pandemic as recession woes amplify

Asia-Pacific shares eye the biggest monthly drop since March 2020.
Fears of economic slowdown, hawkish central bank weighs on equities.
Recent data from China, Japan fail to impress traders amid pre-inflation release anxiety in the market.

Asia-Pacific stocks remain pressured heading into the last European trading day of the worst month in 2.5 years. The region’s equities brace for the biggest monthly loss since March 2020 as traders fear grim conditions ahead, mainly due to the fears of higher rates and a lack of economic optimism.

While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan drop near 12.5% in a month to print the biggest monthly loss since March 2020, up 0.20% intraday. That said, Japan’s Nikkei dropped 2.15% on a day despite firmer activity data from Japan and stimulus hopes.

Further, equities from China, Australia and New Zealand were in the red as the dragon nation flashed mixed activity data while also raising doubts on the Chinese authorities’ market interventions. Elsewhere, Hong Kong shares were likely heading for their worst quarter since 2001 and Chinese blue-chips might also finish September by recording their biggest quarterly loss since a stock market meltdown in 2015, per Reuters.

It’s worth noting that South Korea’s KOSPI and Indonesia’s IDX Composite print mild losses as India announced less than feared rate hikes.

On a different page, gold prices grind higher while the US Dollar Index (DXY) trace yields to defend buyers, despite bracing for the first weekly loss in three. Additionally, WTI crude oil stays ready to snap a four-week downtrend, retreating of late.

Moving on, the Fed’s preferred inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index for August, expected 4.7% YoY versus 4.6% prior, appears crucial for the market players for short-term directions. Also important will be the Eurozone HICPI and CPI details for September. Above all, risk catalysts will be crucial for near-term directions as firmer inflation data could weigh on the equities and roil the mood.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.