Asian stock markets follow Wall Street’s lead downward this morning
Asian stock markets have followed Wall Street’s lead this morning falling sharply as investors made their concerns apparent about economic recessions in some of the larger economies. They also reacted to more threats of instability from the trade war between the US and China.
The Stock Exchange of Thailand (SET) Index dropped 1.6% during this morning’s trading.
US markets led the march downward yesterday, with the Dow Jones closing just over 3% down with the Nasdaq and S&P 500 posting similar falls.
In other markets the Nikkei 225 dropped nearly 2%. In China, the Shenzhen Composite and Shanghai Composite dropped more than 1%, as did the Hang Seng shedding .5%. The reverse was the case in South Korea with the Kospi rising .5%. China’s industrial output grew by only 4.8% year-on-year in July. This growth rate was the lowest in 17 years. (Many other nations would have been delighted to have had a 4.8% growth rate!)
Meanwhile, the German GDP shrank by 0.1% in Q2 2019, raising fears that Europe’s largest economy is heading for recession. On Twitter, US President Donald Trump blamed the Federal Reserve, calling it “clueless” and noting he has repeatedly called for larger interest rate cuts.
Prominent economist and Noble prize laureate Paul Krugman downplayed threats of recession saying that “objectively, the economic problems are nowhere near as serious as 2008, or even 2001.”
“But we’re being led by the gang that couldn’t think straight.”
Krugman blamed Trump and his aides for poor economic policies and said that Fed is unlikely to come and rescue the markets, according to The Nation.
