Global Markets Under Pressure

Asian markets fell sharply last night by taking their momentum from US markets, which plunged after the Federal Reserve Bank’s Chairman Ben Bernanke brought the biggest nightmare for investors. The Fed confirmed that they may start tapering their QE program later this year and this may end until 2014. Most investors were expecting that the Central Bank may wait for more confirmation on the health of the economy before announcing such news, which added the selling pressure in Asia.

Traders were further spooked by a disappointing Flash Manufacturing PMI data released by the second biggest economy of the world, China. The HSBC Flash manufacturing PMI came in at 48.3 while the expectations were for 49.4. The Hang Seng Index was the worst performing index during the session, which closed with a loss of 2.18%. The index is still down nearly 12.37% so far this month. The Shanghai index was the second worst performer and closed with a loss of -2.77. The Nikkei 225 index also came under pressure and closed with a loss of -1.74%.

Commodity sector came under major pressure and shares of Cnooc Ltd and gold miner Zijin Mining Corp. fell sharply with a loss of -4.4% and -4.1% respectively. Jiangxi Copper Co also slid with a loss of -1.6%. Energy sector also fell sharply and shares of Inpex Corp. and Korea Zinc Co both fell by -3.6% and -2.5% respectively.

Back in Europe, the markets have started in a deep red territory and are trading sharply lower during the early hours of trading. The DAX index is the worst performing index during the session and it is down by nearly -2.25%. The FTSE MIB, the FTSE 100, both trading lower with a loss of -1.20%, -2% respectively.

The economic data released for the Euro Zone did show some sign of improvement in economic growth. The Flash Manufacturing PMI data came in at 50.3 while the expectations were for 50.1. However, the biggest economy in the Euro zone, Germany did disappoint investors with its Flash Manufacturing PMI data, which came in at 48.7 while the expectations were for 49.9.

BHP Billiton PLC and Anglo American PLC both are trading lower with a loss of -3.2% and -2.3% respectively. The Banking sector is also taking the pressure and shares of Barclays PLC and Royal Bank of Scotland Group PLC both dropped nearly -1.6% and -0.80% respectively.

DISCLOSURE And DISCLAIMER
The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam