Market falls again, defying gains in other emerging countries

A man looks at an electronic board displaying stock prices at a brokerage house in Beijing, after Asian stock markets sank on Tuesday led by a plunge in the Shanghai index

Global stocks held steady after the Federal Reserve’s policy statement acknowledged global risks, reducing the chances of a March rate hike to 18 percent, according to Bloomberg data, compared with 25 percent on Tuesday. Since the Fed tightened policy on December 16 the MSCI All Country World Index has fallen 7 percent.
China’s Shanghai Composite Index fell to its lowest level since November 2014, taking its decline for the year to 25 percent, the most since 2008. Authorities continue to take measures to stabilize the nation’s financial markets.
This week’s net injection of RMB590 billion (USD90 billion) into the money markets ahead of the start of the Lunar New Year was the biggest since February 2013.
Further declines in the equity benchmark could be on the way. Strategists and technical analysts surveyed by Bloomberg are targeting a bottom of 2,500, compared with 2,656 reached yesterday.
Since the Shanghai Composite Index reached a record high on June 12 it has plummeted 48 percent. It remains the world’s worst performing major equity index in 2016.
Emerging market stocks and currencies gained outside of China as investors stepped up bets the Fed will refrain from raising U.S. interest rates at its March meeting. They have rebounded 4.4 percent from an almost seven-year low last week on Thursday.
Today’s best performing emerging market currency is Malaysia’s ringgit. It rose for a fifth day, the longest winning streak since September. Prime Minister Najib Razak announced a revised 2016 budget to take into account the slump in oil revenue for Asia’s only major net oil exporter. MDT/Bloomberg