Global shares muted, Nikkei, Shanghai down as prospect of US rate cut fades

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Global shares muted, Nikkei, Shanghai down as prospect of US rate cut fades

On Monday, the 8th of July 2019, global shares appeared to have treaded water during late-morning European trading hours, while Asian shares gave away gains on a shambling bet of US interest rate cut as early as this month, as an unprecedent wave of growth in US non-farm payroll data had muted prospects of an aggressive rate cut.

Apart from that, investors’ sentiment was dampened further after US Investment Bank Morgan Stanley had decided to decline its exposure to global equities due to intensifying doubts on its ability to grapple with a tranche of withering economic data.

Meanwhile, world’s fifteenth-largest lender by asset, Germany’s Deutsche bank’s latest reform to trim about 18,000 employees globally, had lifted its shares to more than 4 percent higher. Aside from that, the regional Pan-European STOXX 600 added 0.07 percent, while there had been a broad-based sell-off momentum in Asia with MSCI’s index of Asia-Pacific shares outside Japan was down by 1.4 percent.

Besides, Shanghai blue-chip CSI300 index had experienced its biggest intra-day plunge in more than a month, wrapping up the day down by 2.32 percent, while Japan’s Nikkei 225 had shrugged off 0.98 percent. Bombay Stock Exchange had witnessed the biggest plunge among major markets in Asia, while it winded up the day down by 2.01 percent and Hong Kong’s Hang Seng was down by 1.54 percent at Monday’s (July 8th) market closure.

Addressing optimism on European traders’ bet over an ECB rate cut ahead of IMF’s Lagarde’s Chairmanship, a head of global strategy at Aberdeen Standard Investments, Andrew Milligan said, “The re-adjustment in expectations did push the dollar higher and had a negative effect on Asia but Europe has been supported by investors saying ‘whatever the Fed does, the ECB [European Central Bank] will still cut”.