Australia’s equity markets experienced a downturn this week, with the ASX 200 closing 1.0% lower, halting a three-week streak of gains. The Australian market was particularly impacted by softer-than-expected quarterly GDP data and a global tech selloff. The GDP growth for the June quarter remained unchanged at +0.2% quarter-on-quarter, falling short of the anticipated 0.3%. High borrowing costs and persistent inflation continue to pose challenges, contributing to a cautious economic outlook.
US market decline
Globally, equities faced a challenging week. In the US, the S&P 500, Dow Jones, and Nasdaq all experienced notable declines, with the Nasdaq leading the losses at -5.8%. Disappointing labour market data and concerns over the Federal Reserve’s pace of intervention were key factors driving this selloff. There is increasing speculation that the Federal Reserve will implement rate cuts to address the economic slowdown and support economic stability.
European and Asian markets
In Europe, markets also faced setbacks with the Euro Stoxx 50 and FTSE indices dropping by 4.4% and 2.3%, respectively. Weak US and Chinese manufacturing data, along with underwhelming Eurozone GDP growth, contributed to the declines. Meanwhile, in Greater China and Hong Kong, both the Hang Seng and Shanghai Composite indices fell significantly due to economic uncertainties and lack of robust policy support. Japan’s markets mirrored this negative sentiment with the Nikkei down 5.8%, although the service sector continued to expand, albeit at a slower pace.
Published 10/09/2024
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