Editor’s Note
Asian markets faced broad declines this week, driven by falling precious metals prices and a prolonged Nasdaq slump. The MSCI Asia Pacific Index posted its steepest weekly drop since December, reflecting heightened investor caution.
As of 14:01 Tokyo time, most Asian stock markets declined, influenced by a sharp drop in precious metals and a three-day losing streak for the Nasdaq, which dampened investor sentiment. The MSCI Asia Pacific Index fell nearly 2.5% on a weekly basis, marking its largest decline since December 19 last year.
Hong Kong Hang Seng Index: 26,501.82 (-383.42, -1.43%)
China Shanghai Composite Index: 4,080.31 (+4.40, +0.11%)
Taiwan Weighted Index: 31,712.57 (-88.70, -0.28%)
South Korea KOSPI: 5,014.34 (-149.23, -2.89%)
Australia ASX 200 Index: 8,703.50 (-185.72, -2.09%)
India SENSEX 30: 82,975.94 (-337.99, -0.41%)
In Asian markets today, silver prices plummeted sharply at one point, falling over 40% in just a few days from its all-time high of $121.65 on January 29. Gold, palladium, and platinum also saw significant declines, with crude oil prices following suit.
There are reports that Chinese investors and funds are locking in profits ahead of the extended Lunar New Year holiday. While silver is known for its higher volatility due to its smaller market size compared to gold, the recent movements have been exceptionally sharp. Some describe the situation as akin to a casino, with many investors trading on the sharp rises and falls of silver. Although spot silver has recovered from its morning plunge, uncertainty remains about when another sharp drop might occur.
Financial markets are expected to remain volatile, centered on precious metals, until the policy direction of the next Federal Reserve Chair, Walsh, is confirmed. While former US President Trump has demanded significant rate cuts from the Fed, and Mr. Walsh is expected to act aggressively on cuts… Fed officials like Governor Cook appear reluctant to implement further rate cuts.
Australian stocks recorded their largest intraday decline since last November, hit by a double punch of falling precious metals and expectations of a rate hike by the Reserve Bank of Australia (RBA). All sectors were in decline.
Following the unexpectedly hawkish tone of the recent RBA meeting, expectations for an early additional rate hike have increased, with two more hikes anticipated within the year.
The Shanghai market edged slightly higher. Ahead of the extended Lunar New Year holiday starting on the 14th, there is speculation that Chinese authorities may take steps to stabilize the market. Expectations are spreading that government-linked funds, the “national team,” might step in to support stocks. Buying driven by hopes for expanded consumption during the holiday period continues. The Chinese government has set the holiday one day longer than last year, aiming to boost consumption recovery.