18.01.202116:16 Forex Analysis & Reviews: Europe and Asian stocks sank with the exception of China which recorded economic growth

Exchange Rates 18.01.2021 analysis

The stock markets of the Asia-Pacific region traded in a negative trend on Monday morning, with the exceptions of China and Hong Kong, which reported growth amid recent positive economic statistics. China's GDP increased by 2.3% at the end of last year.

Nevertheless, the overall GDP growth rate in China was the smallest in the last forty years. However, this did not negate the fact that the state was almost the only one who was able to avoid a global fall amid the crisis associated with the coronavirus pandemic. For the most part, the economies of the countries experienced a decline last year, which they hope to compensate for in the coming year.

According to preliminary data from analysts, Chinese GDP was expected to grow by about 2.2%, but in reality, the data turned out to be even slightly better, which could not go unnoticed in the markets. Investors were extremely encouraged by this fact, which was immediately reflected in the stock indicators, which went up.

Particular growth was recorded in the last quarter of last year when the Chinese economy showed an immediate 6.5% growth, which is comparable to the pre-crisis indicators, when the monthly growth averaged 6.8%.

Although, some indicators still slowed down their increase. This may indicate a general decline in business activity in December last year, but it is too early to judge this: we need to wait for official statistics.

In the meantime, market participants continue to wonder whether the new American leader will be able to advance his decision on a serious increase in the financial assistance package for the economy of the United States of America. According to the latest data, only Democrats are on the side of the expanded funding program and their advantage in the Senate is minimal. This means that the chances of final ratification of the stimulus package are very small, although it still remains.

Japan's Nikkei 225 index fell 1% in the morning. According to statistics, the total volume of industrial production in the territory of the state for the last month of autumn last year was 0.5% less compared to the previous indicator. Such a drop is observed for the first time in the last six months and causes some concern among investors. Recall that in October, on the contrary, there was a significant jump by 4% at once.

China's Shanghai Composite Index rose 1.01%. The Hong Kong Hang Seng Index supported the positive trend and climbed 0.61%.

South Korea's KOSPI index dropped significantly by 2.01%.

Australia's S&P/ASX 200 Index fell 0.78%.

European stock exchanges also recorded negative this morning. Major stock indexes are losing their earned positions. The main reason for what is happening is the difficult epidemiological situation in most countries of the region. New strains of coronavirus infection, the extension of quarantine measures, problems with vaccinations, and the supply of drugs leave market participants almost no hope that the pandemic will be defeated in the near future.

The UK government, in particular, has decided to introduce mandatory quarantine for those arriving on the territory of the state. The period of self-isolation, in this case, is ten calendar days, after the expiration of which it is necessary to pass an analysis for COVID-19. The Austrian authorities are once again postponing the release date from the lockdown so that there is no sharp jump in the incidence in the country.

The general index of large enterprises in the European region STOXX Europe 600 fell 0.14% in the morning, which sent it to the level of 407.28 points.

The UK FTSE 100 Index declined 0.11%. The German DAX Index fell 0.07%. France's CAC 40 Index sank 0.25%. Spain's IBEX 35 Index was 0.3% down. The Italian FTSE MIB index was the only one with positive dynamics: it increased by 0.15%.

Maria Shablon,
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