Asia Plunged But Europe Trading Higher

Asian markets plunged on Thursday as volatility occupied the stage. The Nikkei 225 dived more than 5% with heavy selling marking the second worst day for the index this year. It was only a few days back that the index dropped more than 7.3% which was the worst drop in over 2 years. However, the Nikkei 225 tumble was followed by a two straight days of gains for Tokyo.

The Nikkei has closed for the first time below the 14,000 level since 2nd of May and closed at 13,589. Investors are highly concerned about these ultra-swing in the Nikkei and extreme volatility in the stock and bond markets. The Hang Seng index was the second worst performing index during the session which closed with a loss of -0.31%. According to the data released by the Ministry of Finance, investors have sold over 1.22 trillion Yen worth of stocks and bonds in the week to May 25th.
Exporters were the worst performers during the Asian trading session, with Sharp Corp. Fast Retailer Corp. and Hino Motors all posting heavy losses of -7.3%, -11.1% and -6.1% respectively. Telecommunication firm KDDI Corp and Sumitomo Mitsui Trust Holdings Inc. also skidded -6.7% and -7% respectively.

The European stock market is struggling for the direction during the early hours of trading but inching higher with every hour. The FTSE MIB is the best performing index among European indices and it is up by almost 0.42%. The CAC 40, DAX, FTSE 100 all are also trading higher with a gain of -0.40%, 0.05% and 0.25%.

Automakers are under pressure after Goldman Sachs cut the rating of Renault SA from neutral to sell and the shares are down by almost -2.4%. Kingfisher PLC also came under pressure after the 4.2% decline in their fiscal first quarter comparable sales and the shares are trading lower as much as -1.5%. Mining sector on the other hand is doing well during the early hours and the shares of Rio Tinto have added 1.9% in London. Anglo American PLC has also gained 1.6%

DISCLOSURE & DISCLAIMER:
The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam