The Dow leaps 619 points after two days of China woes – as it …
Markets across Asia were holding their breath on Wednesday after early hopes that the worst of this week’s turmoil could be behind them were tempered by concern that China has not done enough to stabilise its economy.
A day after China’s central bank lowered interest rates in an attempt to ease the crisis, most Asia-Pacific stocks suffered minor losses, while Japan’s Nikkei benchmark index mounted a modest comeback after six days of bruising losses.
“There is a sense of relief for now, and stocks with attractive valuations and higher dividend yields are in focus,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
But in China, key share indexes moved up and down as investors continued to sell in a show of apprehension about the health of the world’s second biggest economy.
“The whole market sentiment is still risk-off, which is why markets have taken the latest move from Beijing in its stride and believe more is needed to restore investor sentiment,” said Grace Tam, global markets strategist at JP Morgan Asset Management in Hong Kong.
Tokyo stocks had opened higher amid guarded optimism over the Chinese central bank’s decision to cut interest rates for the fifth time in nine months.
A man looks at an electronic board showing Japan’s Nikkei average and related indices at the Tokyo Stock Exchange. Photograph: Yuya Shino/Reuters
The Nikkei briefly slipped back into negative territory, however, after China’s benchmark Shanghai Composite Index – ground zero for this week’s market meltdown – faltered yet again.
Investor confidence was also hit by a last-minute plunge on Wall Street on Tuesday.
The Dow Jones industrial average ended 204.91 points, or 1.3%, lower, having been up by as much as 441 points earlier in the day. Wall Street extended its losses for six straight days – its longest losing stretch for more than three years.
In early trading on Wednesday, the Shanghai index fell 1.8% but recovered to end the morning 0.8% up. Australian shares fell 0.5%. Stocks in New Zealand, Taiwan and Southeast Asia were mostly lower.
The US dollar avoided any significant drops against the yen, bringing a little cheer to Japanese policymakers, who had voiced concern about the Japanese currency’s surges earlier in the week.
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The Dow leaps 619 points after two days of China woes – as it …
