Asian Markets Are Weaker, Liquidity Concerns Weigh on China

Val Kensington - Author

Aug. 18 2020, Updated 5:28 a.m. ET

Economic calendar

8:00 AM EST – Germany’s consumer price index

8:30 AM EST – US GDP

8:30 AM EST – US initial jobless claims

9:45 AM EST – US FOMC member Mester speaks

11:00 AM EST – US FOMC member Kaplan speaks

11:15 AM EST – US FOMC member Williams speaks

7:50 PM EST – Japan’s industrial production

9:00 PM EST – China’s manufacturing PMI (purchasing managers’ index)

9:00 PM EST – China’s non-manufacturing PMI

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After falling for three consecutive trading days, the Shanghai Composite Index continued to fall and reached the lowest close since February 17. Liquidity concerns have been weighing on Chinese markets this week.

China’s central bank stopped pumping liquidity into the market for the fifth consecutive day. It stated that liquidity levels are at appropriate levels. In addition to liquidity concerns, Chinese markets were also impacted by regulations on the property market. As a result, the market fell—led by materials and infrastructure stocks. On March 30, the Shanghai Composite Index fell 1% and ended the day at 3,208.93. The SPDR S&P China ETF (GXC) closed at 83.05—a fall of 0.14% on March 29.

Hong Kong

After gaining for two consecutive trading days, Hong Kong’s Hang Seng Index pulled back on Thursday. Hong Kong’s markets lost strength due to liquidity concerns in Chinese markets. The Hang Seng Index started the day on a higher note, but lost strength and closed lower. On March 30, the Hang Seng Index fell 0.37% and closed the day at 24,301.099. The iShares MSCI Hong Kong ETF (EWH) rose 0.09% to $22.41 on March 29.


After closing Wednesday flat, Japan’s Nikkei index fell lower on March 30. The stable yen, along with weakness in mining shares, weighed on Japan’s Nikkei index. The transportation and construction sectors led the market decline. The iShares MSCI Japan ETF (EWJ) closed at $52.27 on March 29—a fall of 0.13%. In the next part, we’ll see how European markets are performing in the morning session on Thursday.


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