Asia Pacific markets were sharply lower today, with the Nikkei 225 and S&P/ASX index losing more than 3.2% and 2.1% respectively. The Shanghai SE Composite took the largest hit, closing down more than 4.1% on concerns that monetary tightening in China will hurt economic growth. There were talks amongst traders that China might implement additional tightening measures in an attempt to curb speculation in the country's booming property market after prices surged a record 11.7% in March. The Shanghai index has fallen 16% year-to-date, as the government continues to withdrawal monetary stimulus in order to cool an overheating economy and stem inflation.
Contagion fears continue to weigh on market sentiment after rating agency Moody's put Portugal on downgrade watch, noting the country's deteriorating public finances. In Greece, a nationwide protest in response to newly implemented austerity measures killed three people, as public and private sector workers took to the streets. Although the nation is no stranger to civil-protests, it is these disturbing images that have investors questioning whether the government will be able to adhere to the unprecedented measures needed to regain control of the spiraling deficit.
Crude oil fell below $80 per-barrel, hitting a 2-month low on continued dollar strength. A report yesterday from the U.S. Department of Energy showed that inventories rose by 2.8 million barrels versus analyst estimates of a gain of only 700k barrels, putting more weight on prices. Gold pushed higher, breaking back above $1177 after dipping to $1157.70 early in the US trading session.
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