Asian stocks follow Wall Street lower as growth concerns mount


Stocks across the Asia-Pacific region slipped following a sell-off on Wall Street, as concerns that new waves of coronavirus could stall a global economic recovery rattled investors.

China’s CSI 300 of Shanghai- and Shenzhen-listed shares and Hong Kong’s benchmark Hang Seng fell 0.4 per cent and 0.3 per cent, respectively, in early trading on Tuesday. Australia’s S&P/ASX 200 dropped 0.8 per cent while Japanese markets were closed for a holiday.

HSBC and Standard Chartered both fell about 2.3 per cent, taking the Asia-focused banks’ losses to more than 7 per cent over two days. The lenders were among those named in media reports on Monday that alleged international banks had flagged $2tn in transfers to US anti-money laundering authorities.

The losses in Asia followed a rough session on Wall Street in which the S&P 500 dropped 1.2 per cent while London’s FTSE 100 shed 3.4 per cent due to worries over the outlook for a global economic recovery.

Futures tipped the S&P 500 to slip 0.1 per cent when Wall Street begins trading later on Tuesday.

Markets were “far from confident” in the US Federal Reserve’s ability to generate 2 per cent inflation, said Robert Rennie, head of global market strategy at Westpac. He added that “multiple political flashpoints” in the US, including a fight over a new Supreme Court nomination, had lowered the odds of more fiscal stimulus ahead of November’s presidential election.

Jay Powell, the Fed chair, will tell Congress on Tuesday that businesses hit by the coronavirus pandemic may need “direct fiscal support” as lawmakers in Washington struggle to agree on a stimulus package.

Mr Rennie said investors were also becoming nervous about a week-long holiday in China that begins on October 1 and its impact on global commodities demand. Markets are showing “signs of softening within a number of key commodities”, he added.

Oil prices steadied in Asian trading on Tuesday following a sell-off a day earlier prompted by concerns over the outlook for global demand. Brent crude, the international benchmark, gained 0.7 per cent to $41.71 a barrel.



Read More: Asian stocks follow Wall Street lower as growth concerns mount

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