It’s going to be another wild day on the ASX and one that will be directly the opposite of what we saw yesterday.
In fact, Australian investors pulled the wrong lever in boosting the ASX 200 on Monday by more than 1.1% as the Chinese market again sold off, and Wall Street faded badly at the end of the session.
The Dow swung from a 325 point gain to being down 500 points and then recovered to close down 245 points in a day of wild swings. The closing fall was 0.99%, but the tech-heavy Nasdaq lost 1.6%. The S&P 500 lost 0.66%.
That saw the ASX 200 futures trading knock 83 points from the index at one stage and it was down 50 points just after 7am.
In the end, the Shanghai market was down just over 2% after being off more than 3% at one stage. The fall (and a smaller one in Tokyo) came as the Hong Kong market edged higher and the ASX 200 bounced 1.1% on Monday. That was despite a weak day on Wall Street on Friday.
Despite Chinese government attempts to calm their markets and change policy (such as loosening controls on bank lending, pollution restrictions and tax rebates to exporters) over the last fortnight, the benchmark CSI 300 index, which tracks large-cap shares traded in Shanghai and Shenzhen, has now lost more than 10% this month and 24% so far in 2018.
European markets shrugged off was the surprise decision by German Chancellor, Angela Merkel to resign after her party was badly beaten in a state election in Hesse on Sunday – that’s a move that will worry investors on issues like the dodgy Italian budget, the Brexit deal with the UK and dealing with President Donald Trump.
