- Investor confidence continues to sour in Asia as trade wars and geopolitical tensions keep ramping up.
- Japan’s major Nikkei 225 index has fallen back into familiar levels as August’s bullish recovery gets yanked back into bearish territory.
Asian equities are in decline for the new trading week, with investor confidence getting knocked further back as geopolitical tensions at home and abroad are keeping major indexes in retreat.
Concerns continue to pile up that the US-China trade war will keep impacting China’s domestic economy at an increasing pace, prompting growing fears that the trade war could produce ever-larger knock-on effects for the broader Pacific-Asia region as China’s domestic economy continues to face-off with a potential downturn.
Growing investor unease is also getting hobbled by rising Middle East concerns, with Saudi Arabia effectively holding oil prices hostage as the Saudi regime faces withering condemnation from the global community following the slaying of journalist who was critical of the authoritarian superpower in the Saudi embassy in Turkey. Undeterred by comments from US President Donald Trump, Saudi Arabia threatened over the weekend to impose penalties on the US if any action is taken against Saudi Arabia, also playing on oil prices, noting that Saudi Arabia won’t be hitting their previous production targets and warning that they’re comfortable with oil prices reaching $100/barrel or more.
Equities are softer in Japan, with the Nikkei 225 falling back -2.5% and the Tokyo Topix index slumping -1.15% in Monday’s trading, while China’s indexes see comparable declines, with Hong Kong’s Hang Seng index down -1.00% and Shanghai’s CSI 300 bourse off by -0.85% on the day, while Australia’s ASX 200 is in the red by -0.80% as well. The day’s bright spot was counter-intuitively emerging markets, with the MSCI broad Asia-Pacific index jumping upwards by 1.45%.
Nikkei 225 levels to watch
Japan’s leading equity index, the Nikkei 225, has fallen squarely back into 2018’s major consolidation zone, declining rapidly in October’s trading from a decades-high of 24,470.00, slipping clean past the major 23,000.00 technical handle, a barrier that constrained most of the year’s index action, and the Nikkei is now testing 22,320.00, with the current floor being priced in at early August’s bottom of 22,160.00.
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