Stock markets in Asia opened lower affected of global conditions. Major Asian stock markets open lower on Monday (8 / 8) amid fears over uncertain global economic conditions. Japan Nikkei 225 stock index fell 0.9%. Meanwhile, the Kospi, South Korea, tumbled 1.5%. Similar conditions also experienced by stock markets in Singapore, Australia and Taiwan. Last weekend, the sale of shares plummeted around the world with the loss of trillions of dollars.
This situation is exacerbated by the decision of Standard & Poor's rating agency downgraded the debt of the United States. Economic Analysts said this condition making the stock market would not be stable in the next few weeks. "Downgrade (U.S. debt) is an unexpected situation," said Alvin Liew of Singapore's UOB Bank.
"This situation gives the effect as seen in the outlook for U.S. economic growth is expected to weaken in two or two and a half years into the future, " he added.
With the economic situation which is full of risks like this, then the investor has made many changes to their asset holdings. The result, investors are selling crude oil, with sales to the U.S. fell nearly 3%. This decision was made because of concerns about softening demand. While gold prices rose in Asian markets as investors look for assets that have the lowest risk.
Some analysts said the decline in the stock market has exceeded the limit and many investors see this condition as an opportunity to make a purchase. "This is a spontaneous reaction," said Arjuna Mahendran from HSCB Private Bank. Mahendran added that Asia's economic growth forecast is better than the United States and Europe.
So, investors turned their attention back to the regional market. "There will be rotation of the purchase in Asia. The money will flow from developed to developing markets," said Mahendran.
Crisis-hit Asian stock markets slumped in the U.S. and European economies. Meanwhile, governments and policy makers trying a number of measures to slow the economic crisis in the United States and Europe through a global movement. European Central Bank (ECB) said it would buy the bonds euro zone countries. ECB hopes this move will boost market confidence on the economy of European countries. So far the ECB did not mention which one to buy Treasuries, but it is thought the ECB will buy bonds from Spain and Italy.
In a separate statement, the G7 said it would react coordinated to maintain global financial stability. This statement came out after the Japanese government and central bank intervention into financial markets, last weekend. The conclusion is that the Japanese government's efforts to weaken the yen, Japanese exports rose and economic growth projections.
Asian stock markets weakened came after European stock markets first fell on Friday (5 / 8). Composite index of major European stock markets, including the FTSE 100 and Germany's DAX fell by 4%. This condition followed the U.S. stock market conditions that reached the worst point in the last two years. Although at the close of the market, U.S. market conditions stabilized and closed up 0.5%.
