Yesterday was a dark day for Japan as the Japanese stock market index, Nikkel experienced its biggest one day move since the election of US President Donald Trump one year ago.
Japanese shares suddenly plunged on Thursday after the Nikkei and Topix indexes dropped in the afternoon on future-driven trading ahead of the next days options settlement.
In just over an hour a strong increase transformed in to a sharp decline, with the Nikkei 225 Stock Average plunging about 3.6 per cent from its high point to low point in the same day.
European stocks suffered their biggest fall in four months on Thursday. European stocks did not find a bid alongside Asian stocks, while US index future pointed to a lower open, the Nikkei 225 ended 0.8 per cent lower.
Treasuries yields are up 1-4bps while the Bloomberg Dollar Spot Index declined for a third day.
And Thursday saw the global MSCI index failed by one day to post its best and longest figure since 2003 as it fell 0.4 per cent following 10 straight days of gains.
The MSCI world index rose more than 18 per cent during this year leading some investors to believe a pullback is overdue.
Emmanuel Cau, global equity strategist at JP Morgan said: “I think there’s a feeling out there that there’s a long awaited correction, and no one wants to be caught by surprise.
“When the market is down a bit people tend to extrapolate. But I think it’s simply a bit of profit taking and digesting from a very strong September and October.”
Asia seemed to follow suit with stocks falling after a sharp rise. These stocks falling were linked to US equities after the Senate released a tax plan that would delay cuts to corporate rates until 2019, in direct opposition to Mr Trump.
The MSCI Asia Pacific ex-Japan index fell 0.3 per cent while the Nikkei decreased by 0.8 per cent.
This particular decline was led by Japanese equities which experienced one of the biggest one-day swings in a year.
Margaret Yang, a Singapore-based strategist at CMC said: “Investors are unwinding expectations on Trump’s ambitious tax reform. Delay in tax cuts is the perfect excuse to book profits, but long-term fundamentals remain positive for Asian equities.”
Hong Kong was one of the few exceptions in Asia as stocks traded higher and Shanghai’s benchmark index headed for its best week since August.
Germany’s Stoxx 600 dropped taking the bond market lower.
The pound fluctuated ahead of the sixth Brexit negotiations.
Still, oil prices were far from oscillating as they steadied on the belief that supply will be cut by major exporters.
Saudi Arabia’s stability has been the concern of many after the arrest of 11 princes and dozens of other influential figures last week.
A spokesman for the Saudi Arabia energy minister said the country plans to cut crude exports by 120,000 barrels per day in December from November.
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