Bloodbath in global equity markets continues – Danske Bank

Analysts at Danske Bank point out that Asian stocks fell and Japanese equities decreased deeper into a bear market, with regional shares on course for the worst week since October.

Key Quotes

“The downward move in Asian equities followed US equity markets, which had a tough session with the S&P 500 declining 1.5%, to 2467, its lowest close since late September 2017. The so-called market fear gauge, the VIX index, rose 2.8 points to 28.38, its highest closing level since early February. The negative sentiment follows a week when the Fed appeared more hawkish than the market had hoped for, holding on to further tightening of monetary policy despite the market volatility.”

“The negative market sentiment was also prompted by renewed US-China tensions, which flared up after the US Justice Department filed charges overnight that alleged Chinese officials co-ordinated a decade-long espionage campaign to steal intellectual property and other data from dozens of companies. Treasury Secretary Steven Mnuchin said the indictments are a separate track from trade talks, which are scheduled to pick up again in January. However, China nevertheless demanded that the Justice Department withdrew the comments, highlighting the continuing tension between the world's top two economies.”