Asian financial markets are plunging, and this shock is echoing well beyond the Pacific, reaching European and American stock markets. While China is slow to deploy sufficient stimulus measures, Wall Street is trying to recover, supported by the technology sector. But for how long? The global stock market is going through a period of uncertainty where each stock market index seems suspended on upcoming economic announcements and results.
China hesitates, Asia collapses
Asian investors are in the grip of a real panic, largely due to the lack of concrete recovery actions in China.
The absence of clear signals from the Chinese authorities on massive support for the economy is hitting major indices such as the Hang Seng in Hong Kong and the Shanghai Composite hard.
This Chinese reluctance, in a context of global economic slowdown, worries the markets, which see this as confirmation of the difficulty of the world's second largest economy to get back on its feet.
Companies in the technology sector and industrial stocks, once pillars of Asian growth, are particularly affected. Without significant support from Beijing, many large companies find themselves navigating uncertain waters.
This has led to a decline in foreign investment in China and pushed investors to diversify their portfolios towards safer assets outside Asia.
At the same time, the impact is being felt in other sectors. Raw materials, often influenced by Chinese demand, also recorded notable declines.
The slowdown in Chinese demand for energy and metals is weighing on global prices, amplifying the feeling of vulnerability in financial markets.
Wall Street in resilience mode, Europe under tension
On the other side of the globe, Wall Street is responding with cautious resilience. Tech giants like Apple, Microsoft and Google, nicknamed “Big Tech”, are at the top of the safe havens for investors.
Their strength, fueled by robust profits and global market dominance, provides some reassurance to investors.
However, this lull could be short-lived if the situation in Asia persists. The US market is keeping its eyes glued to upcoming economic results, including the Consumer Price Index and employment reports, which should guide decisions by the Federal Reserve (Fed).
Europe, for its part, seems to be holding back, torn between the effects of the Asian crisis and the uncertainties linked to its own economic situation.
European markets, especially the DAX in Germany and the CAC 40 in France, followed the massive sales movements observed in Asia.
Indeed, the wait for a strong announcement from the European Central Bank (ECB) or a response from China is pushing investors to maintain a wait-and-see position. At the same time, the industrial and luxury sectors, very dependent on imports and exports with China, are under additional pressure.
European bond yields continue to fluctuate, a sign of uncertainty that could persist if China and the United States do not quickly reveal their cards. European investors, like their American counterparts, are also monitoring the ECB's monetary policy, in the hope of increased support. Meanwhile, Saudi oil prices rise for Asia!
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