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Asian Markets Recover from an Early Decline

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Updated

Economic calendar

6:00 AM EST – Germany ZEW Current Conditions (March)

6:00 AM EST – Germany ZEW Economic Sentiment (March)

6:00 AM EST – Eurozone ZEW Economic Sentiment (March)

4:30 PM EST – API’s weekly crude oil stock

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China

After losing strength last week, China’s Shanghai Composite Index started this week on a stronger note and gained in the first two trading days of the week. On March 20, the Shanghai Composite Index opened the day lower but regained strength and closed the day higher.

Market sentiment

The market sentiment in China’s markets was strong despite weak global sentiment. The sentiment improved after Beijing elected a key economic team. Facebook’s data breach rattled US markets on Monday with weakness in all of the major market sectors. On Tuesday, the Asian market sentiment was weak in the opening hours following the decline in US markets overnight. China’s market started to recover in the afternoon session amid comments by Chinese President Xi Jinping. He said that China would expand its reform measures to counter environmental problems. Healthcare stocks’ strong performance also helped the market rebound from intraday lows.

The Shanghai Composite Index gained 0.34% and closed the day at 3,290.46 on March 20. The SPDR S&P China (GXC) declined 1.5% on March 19.

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Hong Kong

Hong Kong’s Hang Seng Index consolidated last week and started this week on a stable note. The Hang Seng Index opened lower on Tuesday following US markets’ decline overnight. The Hang Seng Index staged a recovery in the afternoon session. A recovery in China’s markets helped reverse the price direction on the economic data front. According to Hong Kong’s Census and Statistics Department, Hong Kong’s consumer price index increased 3.1% in February—higher than the expected growth of 1.7%.

On March 20, the Hang Seng Index rose 0.05% and closed the day at 31,545.00. The iShares MSCI Hong Kong (EWH) fell 0.38% on Monday.

Japan

After starting this week on a weaker note, Japan’s Nikkei Index opened lower on Tuesday and ended the day near two-week low price levels. The market sentiment is weak in Japan’s markets amid global trade war concerns and domestic political jitters. The approval rating for Japanese Prime Minister Shinzo Abe declined below 40% amid the cronyism scandal and increased caution in the market. The Nikkei Index fell 0.6% on March 20 and closed the day at 21,352.50. The iShares MSCI Japan (EWJ) fell 1.7% on Monday.

Next, we’ll discuss how European markets performed in the early hours on March 20.

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