The Asian market open lower on Tuesday as investors start to weigh in again the possibilities of a weak economy sign in China. The market fell to its three-week low and is raising concern in the U.S too causing a substantial loss in the Wall Street.
The new data from China shows that the overall profit for Chinese industrial companies fell a lot compared to the last four years. The 8.8 percent profit fell according to CNBC, together with China's Caixin Purchasing Managers' Index that will be released on Thursday sparks fear among investors causing a strong sell-off in the early trade.
Commodity prices are also facing uncertainty as the latest news regarding the Glencore debt broke out. Investors have been heavily selling after the news forcing the stock to plunge nearly 30 percent. The negativity also fuels a sell off for commodity-linked currencies where Australian Dollar lost 0.5 percent and New Zealand Dollar lost 0.2 percent since the news.
There is also fear among investors that the Federal Reserve might cancelled their plan for any rate hikes after the agency decided to leave the rate unchanged amid speculation for a rate hike during the early September meeting.
However, its New York President hinted that the rate hike could be a reality after October meeting as cited by the Business Insider.
With lots of new reports expected to be released soon, the Fed's decision is still uncertain. One of the upcoming reports is the U.S non-farm payroll which is expected to be released this Friday. Another factor is the pressure on the U.S dollar, the country export activity could be declining as the result of a stronger dollar against any other currency.
According to data, currently the U.S. 10-year note stood at 2.098 percent. Euro currency is weaker against U.S. dollar and was traded at 0.1 percent lower to $1.1232 while Japanese Yen traded 0.2 percent higher against U.S. dollar at 119.73 yen.
Reuters reported that among the losers are the MSCI's broadest index of Asia-Pacific shares outside Japan which fell 0.7 percent to its lowest since early September. Japan Nikkei index, on the other hand, fell 2.4 percent during the opening round. Investors are heavily selling China-related stocks in Japan after the latest data as the fear that companies revenue will continue to decline.
The J.P. Morgan Asset Management market strategist, David Lebovitz acknowledge current situation faced by investors. He said that "This is a market driven by sentiment and uncertainty. There's a lot of uncertainty surrounding China and the Federal Reserve."
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