Asian Markets Dip As ECB Meeting Clouds Global Growth Outlook
Investing.com – The global stock slide extended to Asia on Friday morning after the European Central Bank (ECB) cut its 2019 economic growth forecast and announced a series of stimulus measures to encourage lending.
Overnight, the Dow Jones Industrial Average fell 0.78% or 200 points, after falling as many as 321 points. The S&P 500 lost 0.81%, while the Nasdaq Composite fell 1.13%. The S&P broke below its 200-day moving average for the first time since Feb. 11.
ECB slashed its economic growth forecast and announced a round of fresh stimulus after the meeting on Thursday, leaving investors worrying more about a global economic slowdown.
“We are (in) a period of continued weakness and pervasive uncertainty,” said ECB President Mario Draghi.
The news came the same week that China cut its economic expansion target, the Bank of Canada lowered its expectations for policy tightening and the Organisation for Economic Co-operation and Development slashed its global outlook again.
Draghi said in a statement following the policy meeting that ECB would launch a new series of quarterly targeted longer-term refinancing operations in September to help preserve favourable bank lending conditions and smooth transmission of monetary policy.
ECB also plans to keep its key interest rates unchanged throughout 2019.
Before its policy meeting, the ECB had just downgraded its forecast on 2019 euro-area growth to 1.1% from a previous forecast of 1.7% after ending its bond-buying program three months ago.
In mainland China, the Shanghai Composite Index dropped to 3038.98, down 2.17%, by 9:05 PM EST (2:05 AM GMT), while the Shenzhen Component dipped 1.20% to 9562.07. Hong Kong’s Hang Seng Index also slid 1.48% to 28352.28.
Bloomberg reported on Wednesday that U.S. President Donald Trump is pushing for U.S. negotiators to close a Sino-U.S. trade deal soon and quoted sources that said Trump had noticed the market gains following each progress of the talks and is concerned that the lack of an agreement will send stocks down.
Japan’s Nikkei 225 was down 1.54% to 21,125.08 and the KOSPI in Korea traded down 0.94% to 2,145.43.
In Australia, the S&P/ASX 200 was also down by 0.82% to 6,212.40.
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