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Current Futures: Dow -20.00, S&P -2.30, NASDAQ -2.00
Apart from India, every other major Asian stock market is trading in the red on Tuesday, following the negative momentum observed during the U.S. session.
Asian markets continue their downturn, tonight being the sixth consecutive day in which the regional indexes are not able to stay above the break-even line. Investors appear reluctant to increase their holdings for now since there are doubts if the global recovery is strong enough to reflect the bullishness the equity markets have shown over the last few months, TheLFB-Forex.com Trade Team noted. For example, last week reports showed that the unemployment rate surged to 9.5% in the U.S., even though the stimulus bill should have helped cap it around 8%, according to the White House estimates.
Now, some officials are beginning to speak about the second stimulus, something that may indicate the current situation is much worse than expected. Moreover, a second stimulus would further increase the U.S. deficit, which would be another drag on the global economy and thus for the financial market.
The Asian equity markets followed exactly the same pattern as in the last few days. As such, the commodity sector drove the market lower, together with companies that make consumer goods, like electronics or cars. Out of the 225 companies listed in the Nikkei index, only 15 advanced on Tuesday, from which only one gained more than 2%, something that shows the market’s weakness. Moreover, the picture was roughly the same on all Asian markets, as investors pull out of the market for now.
Overnight, the Japanese Nikkei declined 175.87 points (1.82%) to 9,471.92. The Australian S&P/Asx lost 41.30 points (1.10%) to 3,725.60
Crude oil for July delivery was recently trading at $62.00 per barrel, lower by $0.40. Tuesday was the sixth consecutive day in which oil declined, losing almost 15%.
Gold for July delivery was recently trading lower by $4.80 to $923.80. For now, the 920.00 area seems to provide a strong support area.
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