European concerns hang heavily on Asian stocks
City Index September 19, 2011 3:24 PM
<p>Asian markets closed lower today on renewed fears over European debt issues. China’s market was 1.4% lower and now down 12.8% year to date. The […]</p>
Asian markets closed lower today on renewed fears over European debt issues. China’s market was 1.4% lower and now down 12.8% year to date. The market has priced in a lot of growth consolidation in response to inflation targeting issues. While it’s good to see China addressing the inflation situation, the region is suffering from the drag to growth and sentiment.
Despite all the negative press and doomsday predictions over Chinese property, prices for new homes in August rose in all 70 cities monitored for the first time this year. Prices in Beijing advanced 1.9% from a year ago, while those in Shanghai, the nation’s financial center, increased 2.8%.
What happens in China and the sentiment around growth is important for the whole region, Australia included. The ASX200 seems to have held the all important 4,075 support level today, despite closing 1.6% lower.
Corporate news flow remains very quiet, with the exception of Premier Investments and David Jones rounding out the report season this week. The market will look to the Reserve Bank of Australia (RBA) meeting minutes tomorrow to see where the weight of argument lies with the central bank – on inflation targeting or concerns around global growth.
At the same time, all eyes will also be on the US Fed’s meeting this week with expectations of a commitment to support growth at all costs.