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As the market players are aware, trade tensions between the US and China have worsened and could be a serious concern for the health of the global economy. The investors might decide to sell their present holdings in equities. Needless to say, the global stock markets are extremely sensitive to the macro-economic factors as well as to the geopolitical conditions. The fall in Chinese currency has negatively impacted the sentiments of the market players and the worries about the global economic slowdown significantly impacted the Dow Jones Industrial Average on August 5, 2019.
The trade tensions could disrupt the global business environment and lead to the global economic slowdown. On August 6, 2019, Dow Jones Industrial Average witnessed a significant fall of 767.27 points or 2.90% to close the session at 25,717.74. On the same day, S&P 500 Index encountered a fall of 2.98% or 87.31 points to close at 2844.74. The slowdown in the global markets could significantly impact the investorsâ investment decisions and they might decide to deploy their investable capital towards safer instruments.
Disturbing Global Economic Conditions Can Influence Oil Prices
The oil prices are influenced by the macro-economic factors and by the news associated with the trade battle between the US and China. In the event of global economic slowdown, the oil demand comes into question which could affect the oil prices as well. More or less, the movement of stock markets can also affect the oil prices. To bring stability in the stock markets, the trade battle needs to end on a permanent basis. However, in the current scenario, the global investors are worried about the global economic slowdown.
Australian Markets Ended in Red: S&P/ASX200 Falls 2.5%
The Australian markets are negatively impacted if the concerns about the global economic slowdown increase. The fear of slowdown could prompt the Australian investors to liquidate their holdings which could, in turn, negatively impact the broader stock markets. On August 6, 2019, S&P/ASX200 witnessed a significant fall of 162.2 points or 2.5% on an intraday basis and was settled at 6478.1. Also, on the same day, All Ordinaries encountered the decline of 164.1 or 2.5% to close at 6546.5.
Let us now have a look at the performance of some stocks on ASX. Pinnacle Investment Management Group Limited (ASX: PNI) witnessed an increase of 10.336% to close the session at A$4.270 per share while Lynas Corporation Limited (ASX: LYC) rose by 7.874% to close at A$2.740 per share. On the other hand, WiseTech Global Limited (ASX: WTC) and NRW Holdings Limited (ASX: NWH) encountered a fall of 8.02% and 6.818%, respectively on an intraday basis on ASX.
We have written some important information on five resource sector and related stocks (i.e. COB, AVZ, BRU, IGO and WGX) for the investors. To have a quick look at the information provided, please click here.
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