Investors sit in front of an electronic stock board before market opening at a securities brokerage in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)

$5.6 Trillion Asia Stock Loss Has Traders on Edge of Their Seats

(Bloomberg) -- With three days of Asia equity trading left for the year and low volumes across the board, traders don’t seem to be taking any chances.

About $5.6 trillion of equity value has been obliterated in the region this year as the global carnage shows no let-up. And investors are bracing for volatile days ahead.

Today is a classic example of that:

  • The MSCI Asia Pacific Index, which climbed as much as 0.6 percent on Wednesday, swung between gains and losses and was 0.2 percent higher as of 4:20 p.m. in Hong Kong.
  • Japan’s Nikkei 225 Stock Average also had a choppy day but ultimately closed up 0.9 percent after entering a bear market on Christmas Day.
  • U.S. stock-index futures fluctuated between gains and losses, with the S&P 500 Index on the brink of entering a bear market when it reopens on Wednesday.
  • Hong Kong, Australia and New Zealand remain closed for a holiday.
$5.6 Trillion Asia Stock Loss Has Traders on Edge of Their Seats

There’s a chance that 10-year U.S. bull market comes to an end when markets reopen even after U.S. President Donald Trump gave his first expression of public support for Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell since Bloomberg News last week reported that the president had discussed dismissing the Fed chief, who was recommended by Mnuchin.

“The direly weak sentiment continues to be the engine behind the declines for markets that have yet to find the panacea in the form of any positive impetus,” said Jingyi Pan, market strategist for IG Asia Pte. “The weight that is given to President Trump’s assurances is simply much lighter than the threats he is throwing.”

And news from elsewhere did little to excite investors:

  • On Tuesday, China released new rules promising to treat all firms equally from a regulatory standpoint, whether they are foreign, private Chinese companies or state-owned enterprises.
  • Chinese authorities also said they are studying plans to help banks replenish capital, as President Xi Jinping vows to step up support for the nation’s struggling private sector.
  • North and South Korean staged a symbolic ground-breaking ceremony to upgrade severed rail links, although UN Security Council approval would be needed to advance the project. Long-stalled plans to restore rail links severed by the Korean War were revived in historic summits by North Korea leader Kim Jong Un and South Korean President Moon Jae-in earlier this year.
  • Islamic State claimed a suicide attack on the Libyan Foreign Ministry’s headquarters in Tripoli that officials said killed three people, in the latest blow to efforts to stabilize the war-ravaged North African nation.

What’s next? “As far as the futures are suggesting, the market is indecisive right now,” Pan said. “One should not be surprised if most are still waiting out the storm this week.”

With less than a week left in 2018, here’s a look at how major stock markets have done this year across the region, as of Dec. 25:

CountryChange in market value ($ billions) 
Australia -257.61
China-2,328.94
Hong Kong-574.86
India -351.21
Japan-1,248.4
South Korea-351.28
Taiwan-173.39

Stock-Market Summary

  • Japan’s Topix index up 1.1%; Nikkei 225 up 0.9%
  • Shanghai Composite down 0.3%
  • Taiwan’s Taiex index down 0.5%
  • South Korea’s Kospi index down 1.3%; Kospi 200 down 1.3%
  • India’s S&P BSE Sensex Index down 1%; NSE Nifty 50 down 0.9%
  • Singapore’s Straits Times Index down 1.3%; Malaysia’s KLCI down 0.6%; Philippine Stock Exchange down 0.4%; Jakarta Composite down 0.6%; Thailand’s SET little changed; Vietnam’s VN Index down 0.7%

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