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Analysis News:::2020-07-24

Asia, America, and Europe stocks record declines


Asia-Pacific stock markets on Friday moved to a reduction in key indicators due to the unceasing conflict between the US and China.

Note that Japanese trading floors are still closed due to the holidays, so the main negative message was received by the Chinese exchanges.

China's Shanghai Composite index dropped significantly by 3.1%. The Chinese indicator - Shenzhen Composite also dropped by 4.02%. The Hong Kong Hang Seng index, on the other hand, suffered less with a decline of 2.34%.

The escalation of the conflict between Beijing and Washington is the main topic of recent days. There were reports on Thursday that the US government is closing the Chinese diplomatic mission in Houston, Texas. The response from the PRC authorities was not long in coming. It has already become known that the Chinese government has decided to take a similar action, namely, to close the American consulate in Chengdu, which is the administrative center of Sichuan province.

The US government has actively embarked on anti-Chinese rhetoric against the authorities. For example, the US Secretary of State yesterday issued an appeal to the Chinese people to unite with other nations of the world in the fight against the policies of the Chinese Communist Party. According to him, party interests are becoming higher than the freedoms of citizens and threaten the world community as a whole. However, there is no talk of the end of the negotiation process between the states, since China continues to fulfill all the obligations imposed on it. Nevertheless, the Americans plan to thoroughly check everything that the Chinese authorities do, since they no longer trust them at their word.

All this, of course, has a negative effect on investor sentiment in the stock markets. The situation is becoming even tenser amid a sharp decline in major US indices following Thursday's trading session.

South Korea's Kospi is down by 0.43%.

The Australian S & P / ASX 200 also supported the negative trend and shed 1.28%.

The US stock markets also experience difficulties, where at the close of Thursday's trading a rather significant decline was recorded in all major directions. Even the fact that during the previous four days a good climb was noted did not save the situation. The main reason for the fall is the sharp refusal of market participants from securities of the technology sector, which in turn occurred against the background of not very impressive economic statistics reflecting the activities of enterprises in the first half of this year. In addition, the aggravating epidemiological situation in the country and the world as a whole is putting pressure on the US stock market.

Furthermore, investors are straining the investigation launched in several US states against Apple, which is once again accused of cheating its own customers. Against this background, its shares began to rapidly reduce their value, which has already gone into negative territory by 4.6%.

The statistics from the US labor market are also not very impressive. Thus, the number of applications for unemployment benefits has increased and is now in the range of 1.42 million applications, while, according to preliminary data from experts, they should not have exceeded 1.3 million applications.

Against this background, it becomes clear why the head of the US Treasury is insisting on the early adoption of a law on a new portion of stimulating measures in the country. Note that the previous package of measures will expire at the end of the current month. The new project should also include at least one trillion dollars in aid to the unemployed citizens of the country, and its validity - to last until the end of this year.

The Dow Jones index fell by 1.31%, which forced it to move to the level of 26,652.33 points.

The S&P 500 index sank 1.23%: its current value is within 3,235.66 points.

The Nasdaq index leads the fall declining to as much as 2.29%, and the total value moved to the level of 10,461.42 points.

Meanwhile, there is no positive on the European stock markets either. The escalating conflict between the United States and China makes investors in Europe quite worried. However, they also have one more topic that is closer to them, which concerns the agreements between the EU and Great Britain on the conditions for the future withdrawal of the latter from the alliance. The latest news suggests that so far no consensus has been reached and is unlikely to be achieved in the near future since there are too many disagreements. The possible adoption of some positive decisions on this issue can occur at best in September this year.

However, the statistics on economic growth in the region are quite satisfactory. Thus, the PMI index, which includes nineteen countries in the region, in the second month of summer rose to 54.8 points, while the previous value was at 48.5 points. Preliminary forecasts were somewhat more modest: growth to 51.1 points was expected. An indicator is a fact that the level was able to cross the strategically important mark of 50 points, which indicates an increase in business activity.

The general index of large enterprises in the EU Stoxx Europe 600, reflected a decline of 2.01% and stood at around 366.13 points.

The UK FTSE 100 Index sank 1.58%. The German DAX index became the leader of the fall: it parted with 1.99%. France's CAC 40 index did not stray too far from its German counterpart: it decreased by 1.97%. Italy's FTSE MIB fell 1.92% while Spain's IBEX parted from 1.67%.

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