There is a multidirectional movement on the stock exchanges of the Asia-Pacific region today, the cause of which, first of all, is the growing tension between the United States of America and China. In addition, previously presented concerns about a slowdown in economic recovery in the region seem to be starting to materialize.
Despite the fact that the world's stock markets for the most part managed to recover all the losses that were associated with the crisis caused by the coronavirus pandemic, there is still a long way to a final recovery and sustained growth. Experts argue that a fast pace of recovery will also bring the economy more problems than positive things in the long run. Moreover, the growth in the number of infected with COVID-19 does not stop and even begins to grow rapidly in certain regions and countries. The situation is especially serious now in the United States of America.
But even more problems may arise against the backdrop of an escalating conflict between Washington and Beijing. Any news on this topic is extremely important for market participants.
Thus, reports that the American diplomatic mission in the city of Chengdu, located in Sichuan province, stops its activities at the insistence of the Chinese authorities, caused some panic in the markets. Recall that this was a retaliatory measure against the United States after the American authorities decided to close the Chinese Embassy in Houston, Texas. Market participants began to fully realize that the conflict between the countries is protracted and will only gain momentum in the near future.
China's Shanghai Composite index went up 0.29% this morning. The Hong Kong Hang Seng index showed a negative trend, which reached 0.37%.
According to the statistics received, the profits of the largest Chinese enterprises in the industrial sector in the first month of the summer increased again. This was the second growth in a row, which may be evidence of a gradual recovery of the country's economy from the crisis. The total profit margin was approximately 20 million yuan higher than the previous figures, which speaks for a rather significant increase of 11.5%. Thus, profit reached the level of 666.55 billion yuan, or 95.22 billion dollars in terms of dollars. At the same time, the growth rate became one of the highest in the last year. Let's remember that this indicator was at the level of 6% in May.
Japan's Nikkei 225 index began to fall, the morning drop was 0.17%.
On the contrary, South Korea's Kospi index found support for growth, as it grew to 0.8% to the previous level.
The Australian S&P/ASX 200 was also in positive territory, adding 0.24%.
US stock markets ended last week's working day on a minor note, the reduction was noted almost everywhere. The negative side of strained relations between Washington and Beijing is also weighing on investors here. However, another important topic is still corporate reporting, the season of which has not yet come to an end.
The Dow Jones Industrial Average dropped 0.68%, or 182.44 points, which moved it to the level of 26469.89 points.
The S&P 500 index lost 0.62%, or 20.03 points. Its current mark was around 3215.63 points.
The Nasdaq Composite index lost more than the rest at -0.94%, or 98.24 points. This forced it to settle within 10363.18 points.
In general, the main US indicators showed a moderate negative trend over the past week. The DowJones ended up 0.8% in the red, interrupting its four-week winning streak. The S&P 500 parted with 0.3%, and the Nasdaq became the leader of the decline, which it had 1.3% for the second straight week.
The epidemiological situation in America also remains tense, which market participants are closely monitoring. According to experts, uncertainty will persist for a long time in the markets, which will be reflected in the level of volatility, which is now quite high and will remain so for a long time.
On the other hand, the statistics are pretty good. For example, sales of new buildings in America over the past month increased to their highest values in the last thirteen years. There were 13.8% more new houses in June of this year, and their total number reached around 776,000. The figure was more modest in the last month of this spring - 682,000 new homes, but even it exceeded preliminary forecasts of 676,000.
However, while even positive statistics in the economy are not able to keep stock indicators in a positive zone, they have started a correction, the limit of which is not yet clear.
European stock markets supported the global downward trend and also mostly moved into the negative zone. The conflict between the US and China here is played the least, the focus of investors is news about the mandatory quarantine of arriving on the territory of Spain and the UK. The tourism industry is again beginning to experience unpleasant difficulties, which is reflected in the general mood of market participants.
The general index of large enterprises in the EU Stoxx Europe 600 is still slightly falling by 0.08%.
The UK FTSE 100 Index is down 0.3%. France's CAC 40 index lost 0.32%. Spain's IBEX Index became the leader in the fall, losing 1.44%. The German DAX index is the only one showing positive dynamics at +0.21%. The Italian FTSE MIB index remains indecisive and unchanged.