Investor Fears Shake Currency and Stock Markets
Asian stock indexes were lower on Tuesday after impressive rallies on Monday as traders were once again expressing fears about the U.S.-China trade war and other geopolitical concerns. All major Asian indexes were firmly in the red, with South Korea’s Kospi leading the pack with a 2.40 percent decline in the early afternoon, up slightly from its fall below 2.5 percent. The index is hovering near a 1 ½ year low. Japan’s Nikkei 225 was down 2 percent at 12:20 p.m. HK/SIN. The Shanghai Composite which gained over 4 percent on Monday, was down 1.37 percent just after noon in Hong Kong, and the Shenzhen Composite was down 1.41 percent Australia’s ASX 200 was 0.84 percent lower. The Asian struggles came after the S&P 500 and the Dow Jones Industrial Average both closed lower on Monday.
On the currency markets, traders were flocking to the safe-haven U.S. dollar. The greenback was trading near a two-week high on Tuesday, and the dollar index was up 0.04 percent to 96.06 .DXY. Investors were wary of the British pound on fears that the ongoing Brexit negotiations were stalling as policymakers couldn’t come to an agreement regarding the Irish border. There is just over five months until the United Kingdom is set to leave the European Union, and Irish border disagreements remain at the forefront of the controversy.
The pound was down 0.01 percent against the dollar to $1.296, relatively flat after sliding over 0.8 percent on Monday. The dollar also gained against the euro as investors expressed concerns about Italy’s free spending budget. The euro was down 0.08 percent against the dollar, trading at $1.1454.