17/08/2023
Today’s Announcements & News
Asia
Asia-Pacific markets experienced a significant sell-off on Wednesday, following the trend set by Wall Street after a decline in U.S. banks’ shares.
The decline in U.S. banking shares, including JPMorgan Chase, Wells Fargo, and Bank of America, was triggered by warnings from Fitch that it might downgrade the credit ratings of numerous banks, including JPMorgan Chase. Moody’s also downgraded the ratings of 10 U.S. banks last week and put other major institutions on a watchlist for potential downgrades.
In Japan, the Nikkei 225 index dropped by 1.46% to close at 31,766, falling below the 32,000 mark for the first time in over a month. The Topix index closed down 1.29% at 2,260.84, despite a slight improvement in business sentiment in July according to the Reuters Tankan survey.
South Korea’s Kospi index experienced a decline of 1.76% after returning from a public holiday, closing at 2,525.64. The Kosdaq index saw a larger loss of 2.59%, ending at 878.29, its lowest level since July 11.
In Australia, the S&P/ASX 200 index slipped by 1.5%, closing at 7,195, marking its third day of losses in four days.
Hong Kong’s Hang Seng index fell by 1.31% in its final hour of trading, while mainland Chinese markets also saw declines. The CSI 300 index closed 0.73% down at 3,818.33. China’s house price index fell into contraction territory for the first time since April, dropping by 0.1% year on year.
US
On Wednesday, stock markets experienced a decline as investors processed the summary of the Federal Reserve’s July meeting, which indicated a potential for higher interest rates.
The Dow Jones Industrial Average fell by 180.65 points, or 0.52%, closing at 34,765.74. The S&P 500 index decreased by 0.76% to end at 4,404.33. Additionally, the Nasdaq Composite index declined by 1.15%, closing at 13,474.63. This marked the second consecutive day of losses for all three major stock market indexes.
The minutes of the Federal Reserve’s July meeting revealed that policymakers discussed the possibility of further tightening monetary policy to address persistently high inflation. The meeting summary stated that due to inflation remaining above the Committee’s long-term goal and the labor market staying tight, there were significant upside risks to inflation, which might necessitate additional tightening of monetary policy.
Currently, the federal funds rate is within a range of 5.25% to 5.5%, which represents the highest level in over 22 years.
Commodity
Despite a substantial decrease in U.S. crude inventories, oil prices experienced a decline on Wednesday. This drop was attributed to concerns about China’s struggling economy and the anticipation of tighter supply in the United States.
Brent crude futures fell by $1.23 to reach $83.66 per barrel, while U.S. West Texas Intermediate crude (WTI) dropped by $1.33 to reach $79.66 per barrel. Both benchmarks had declined by over 1% in the preceding session, marking their lowest levels since August 8.
The Energy Information Administration’s data indicated that U.S. crude oil inventories had decreased by nearly 6 million barrels in the past week due to robust exports and refining run rates. Despite this decline, crude production had risen to its highest level since the onset of the pandemic, which significantly impacted fuel consumption.
Gold prices also experienced a decrease on Wednesday, influenced by a stronger dollar. The minutes from the Federal Reserve’s July policy meeting revealed that policymakers were divided about the necessity of further interest rate hikes.
As of 2:15 p.m. EDT (1815 GMT), spot gold had dipped by 0.2% to $1,897.00 per ounce, and U.S. gold futures concluded 0.4% lower at $1,928.30 per ounce. The dollar index had risen by 0.2%, making gold more costly for international buyers.
The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.
