Global sharemarkets yesterday continued to wither under the glare of US-China trade tensions, further compounded by the effects of holidays in China, Japan and the United States.
Brokers at Craigs Investment Partners and Forsyth Barr have recounted losses across most of the major markets at the start of the week, a week in which strong results are later expected from US corporates.
The NZX started the week down 0.74% on Monday, the ASX had its worst one-day performance since March — down 1.4% in all sectors — China stocks booked their worst day in three months and the benchmark Shanghai Composite Index was down 3.7% after the annual Golden Week holiday.
A holiday closed Japan’s market on Monday, while Hong Kong’s Hang Seng was down 1.4% and South Korea’s Kospi fell 0.6%.
For the year, Chinese indexes were down about 18%, Reuters reported.
China’s central bank has just slashed the level of reserves which must be held by banks, releasing an estimated $US175billion ($NZ272billion) for reinvestment in its faltering economy.
In the US, technology stocks faltered, and the Nasdaq was down 0.67%, the S&P500 was flat, down 0.4% and the Dow Jones Industrial Average closed up 0.15%.
Forsyth Barr broker Damian Foster said rising interest rates had continued to cause stocks in the US to fall, Europe and UK moved down because of political concerns and Asia was dragged down by losses after China markets returned from a week off.
"Global markets have started a fresh week the way they finished the last, with widespread losses in most major regions," he said.
Craigs Investment partners broker Peter McIntyre said after the NZX was initially trading flat in the morning, it fell in the afternoon when Asian markets opened and revealed early declines.
He said in the US, technology stocks had been a major driver of the bull market in recent years, but were "now showing signs of faltering".
He said the US bond market was closed for a holiday on Monday.
The US equity markets were last week "unsettled" after Treasury bond yields rose to 3.23%, the highest level since May 2011.
In Australia, ANZ’s shares fell 2.6% to $A26.99, after it flagged a $A824 million hit to its expected full-year profit, from impairments and one-off expenses, more than half related to customer remediation payments.
Reuters reported European markets also slid, with defensive stocks under pressure as investor confidence took a hit from last week’s spike in the US Treasury yields and heightened expectations for further US interest rate hikes by its Federal Reserve.
On Wall Street, the tech-heavy Nasdaq fell for the third straight day, though the broad S&P 500 pared losses to end nearly flat as defensive stocks offset a decline in growth shares.
"Growth stocks are so sensitive to global growth expectations," said Chad Morganlander, senior portfolio manager at Washington Crossing Advisers in Florham Park, New Jersey.
"Any time you see concern about that, you’ll see the reversal of that trade."
The US remained concerned about China’s recent currency depreciation, a senior Treasury official said, adding it was unclear whether Treasury Secretary Steven Mnuchin would meet any Chinese officials this week.
Washington last month slapped tariffs on $US200 billion worth of Chinese goods, which prompted Beijing to retaliate with duties on $60 billion worth of US products.
