Asian stock markets fell amid growing fears of a global recessionDeltafx Admin 17 January 2023
Most Asian stock markets fell Tuesday amid growing fears of a global recession this year, while mixed growth data from China added to uncertainty about the timing of a recovery this year.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.3% and 0.4%, respectively, after data showed the country’s economic growth slowed sharply in 2022 from a year earlier.
Economic activity still grew faster than expected in the fourth quarter. This, along with positive industrial production and retail sales figures in December, showed that some areas of the world’s second-largest economy are starting to recover.
Uncertainty about a major recovery remained, however, as the country struggles with its worst-ever COVID -19 outbreak.
Broader Asian stocks slipped amid renewed concerns about a global recession. A survey by the World Economic Forum found that two-thirds of economists polled expected a recession this year, while a separate survey of corporate executives by PricewaterhouseCoopers also found a gloomy outlook for the economy this year.
Asian markets are likely to suffer prolonged losses in the event of a recession, as foreign capital flows to the region are likely to dry up in such a scenario. A slowdown in the major economies also threatens to spill over to the regional markets.
The focus is now on the fourth-quarter earnings season, with markets watching to see whether deteriorating economic conditions will affect corporate profits.