BoJ Decision Shocks Global Markets

Asian markets closed with deep bruises on Tuesday after the Central Bank of Japan concluded its two day meeting which disappointed investors. The Bank of Japan announced no changes in their asset purchase program which was expected by some investors along with their promise to keep the ultra-low interest loan to banks for an extended period of time. The Central bank confirmed that it will take necessary steps to calm the bond market and used slightly more upbeat language to describe the health of the economy.

The Yen fell against the greenback after the Bank of Japan’s announcement. The dollar was already trading higher after Standard and Poor raised the outlook of the US from negative to stable due to the country’s improving economic performance.

The Nikkei 225 was the worst performing index during the session which closed with a loss of -1.45%. The Hang Seng index was the second worst performer and closed with a loss of -1.23% while mainland China remained close due to a public holiday.

Softbank Corp came under pressure and the shares for the company fell by 1.1% after it agreed to increase its offer for Sprint Nextel Corp from $20.1 billion to $21.06 billion. Samsung Electronics Co. also fell by almost 2.9% after investors exhibited their doubts about the number of handsets sold which could be below expectations.

Back in Europe, the stock markets are trading sharply lower during the early hours of trading. The DAX is the worst performing index during the session and it is down by nearly -0.84%. The IBEX 35, FTSE 100 and CAC 40 are all also trading lower with a loss of -0.83%, -0.74% and -0.73% respectively.

Shares of the ICAP PLC are trading lower by -3.6% after a rating cut by Credit Suisse from neutral to underperform. The mining sector is also taking the heat as metals are plunging this morning and the shares of Rio Tinto PLC and BHP Billiton both have shaved off -1.4% and -1.9% respectively.

DISCLOSURE And 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