Precise Investors Editorial Team
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.3%
Asian stock markets extended their losses for a third session on Wednesday, while a global bond rout appeared to slow for now.
In early trade, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.3%. Nikkei plunged 1.2%, down for the fifth straight day.
Fears of offshore selling of U.S. assets – the so-called “Sell America” trade that emerged after last year’s “Liberation Day” tariff announcements in April – gripped markets as U.S. stock market dropped more than 2% overnight and the dollar suffered its biggest decline in over a month.
That sent investors fleeing to the safety of gold and silver, which both notched record highs.
The ‘sell America’ trade was the driving force behind major market moves overnight, as investors looked to reduce exposure to the U.S., seen by many as an unreliable partner pursuing self-defeating policies, said Mantas Vanagas, a senior economist at Westpac.
Trump, however, doubled down on his rhetoric over Greenland, saying there was “no going back” on his goal to control the island, refusing to rule out taking it by force. His threat of tariffs on Europe has also rekindled fears of a global trade war.
The European Union will convene an emergency summit in Brussels on Thursday to discuss the matter, with the long-standing U.S.-EU alliance clearly at risk.
All eyes are now on the World Economic Forum in Davos where Trump is due to deliver a speech on Wednesday.
Nasdaq futures and S&P 500 futures gained 0.2% after stock market suffered the biggest daily decline in three months overnight. The S&P 500 shed 2.06% while the Nasdaq Composite slipped 2.4%.
Both EURO STOXX 50 futures and DAX futures dropped 0.4%
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