U.S. Data Calm Investor Nerves

On Friday, Asian stocks clawed back some of the losses of this week after a robust set of U.S. data claimed turbulence in global financial markets. However, investors were kept on edge with underlying worries about slowing world economic growth.

U.S. Data Calm Investor Nerves

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.2 percent but the Nikkei share average .N225 fell 0.5 percent to 4-1/2-month lows.

“We need to see a period of better data from the U.S., and especially Europe, for markets to really calm and volatility to cool,” said Chris Weston, chief market strategist at IG Markets in Melbourne.

“People still think the U.S. economy is on solid ground. But they don’t think it is strong enough to lead the global economy,” said Hiroshi Ono, the head of equity investment at Sumitomo Life.

On Monday, the Volatility index .VIX, which is viewed as a gauge of investor fears, eased to 25.2 percent from a 2 1/2 year high above 31 percent hit.

“I expect market volatility to gradually to come down. Loss-cutting trades will come to an end soon after a hectic week and markets will be looking to what kind of policy options major countries can adopt now,” said Makoto Noji, senior strategist at SMBC Nikko Securities.

On Wednesday, the U.S. dollar also recovered, with the dollar index stabilizing at 84.950 .DXY, off a three-week low of 84.472 hit. “It was largely a cool-down session, spiced up by solid U.S. data and a surprisingly dovish comment from Fed member Bullard,” analysts at CitiFx wrote in a note to clients.

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