China anxiety over Asian stocks, Aussie dollar hit
Asian stocks skidded to five-week lows on Monday, giving European markets a negative lead after a batch of weak data out of China raised the spectre of a sharp slowdown in the world’s second-biggest economy.
“As if traders didn’t have enough to contend with this week what with the Scottish referendum and the FOMC meeting, China has flapped their hands in the air to remind everyone that they are facing an abrupt slowdown,” Capital Spreads trader Jonathan Sudaria wrote in a note.”
“Equities in China have actually done reasonably well considering the situation and perhaps stimulus hopes are helping to put a floor on the losses,” said Stan Shamu, strategist at IG.”
The bearish Chinese data has added to worries about a 40-percent slide in iron ore prices.
There has been strong demand for the greenback as investors positioned for a slightly more hawkish shift from the Federal Reserve this week at its September 16-17 policy meeting.
“The key question surrounding this week’s policy event is whether a widely expected change in FOMC forward guidance is sufficient to refuel USD buying,” Credit Agricole analysts wrote in a report.”
Sterling remained on tenterhooks just days from the Sept 18 referendum for Scottish Independence.
A win for the “Yes” campaign could result in the end of the 307-year-old union with England and the break-up of the United Kingdom.
Source: Reuters – Asian stocks give European markets a negative lead
