SHARES in most of Asia slid after employment figures of the US and easing inflation in China aggravated concerns on the sagging world economy, with traders not being very optimistic that a Euro Zone summit at the end of the day would usher in any progress for the continent’s key financial institutions.
The euro suffered a 2-year low of $1.2224 in Asian trading on Monday, but steadied later on to peak at 0.2 percent at $1.2284.6. The widest index of the MSCI for Asian-Pacific stocks outside Tokyo dipped 1.4 percent, snagged by the materials and energy sectors.
However, shares in most of Europe were seen to move a little bit higher, with monetary event wagers calling the key indexes in Frankfurt, Paris, and the UK to open up 0.3 percent. Stock futures in the United States, on the other hand, fell 0.29 percent.
Consumer and producer price index in Beijing eased more than initially thought last month, indicating a fall in commodities’ demand from the second largest economy in the globe and the possibility of further growth-backing ruling efforts from the government.
According to Shanghai-based Guotani Junan Securities analyst Jin Wang, the trend of easing inflation will continue in the next few weeks, which is expected to give better scope for relaxation on financial policies moving forward.
The development comes ahead of China’s second-quarter GDP, which is seen to be very bleak in the next three years, and after major machinery orders from Japan stumbled earlier last week as well as weaker-than-forecast payroll figures from the United States.
Oil was backed by positivism that sluggish data from Beijing would trigger further stimulus to support growth and enhance demand for other commodities such as fuel and gold.
Oil nears $85/barrel
Oil increased slightly on Monday to near $85/barrel, gaining back some the commodity’s huge drop from a previous session in the midst of optimism that laggard economic data coming from the US may spark efforts for more stimulus.
On Friday, the US Department of Labor announced that the economy integrated 80 thousand jobs in for the month of June, which was lesser than predicted and raised theories the Federal Reserve may impose further financial aid, otherwise referred to as quantitative easing.
The ECB and Beijing’s People’s Bank last week both slashed lending interest rates in a move to bolster weak global economic performance.
August benchmark oil delivery soared to a measly $0.35 at $84.81/barrel mid-day Singapore session in the NYMEx electronic trading. Crude was down $2.76 to end at $84.44 in New York, Friday.
Beijing on Monday pointed out that the government’s yearly inflation figures dipped 2.1 percent, its lowest since 2010. Experts stressed that slowing the pace of inflation can provide policy makers enough legroom to work on a badly-needed stimulus and strengthen overall demand.