After the sad events that occurred overnight in the UK – Manchester, we have noticed some negative impact on the markets, including Asian equities, European equities, and currencies.
However, such impact was short-lived and most of the markets have recovered its initial declines, supported by economic releases.
Asian Equities Declines
Despite the Yen weakness in Asia, Nikkei 225 managed to close the day lower by 0.33%, while Shanghai Composite Index closed lower by nearly 0.5%.
Over the past two months, investors have been grappling with a regulatory crackdown on risky lending practices and a shift toward tighter monetary policy as Beijing stepped up measures to defuse financial risks. Such fear continues to push investors away from stocks for some time.
Europe Recovered After A Red Open
The European equities had a rough opening bell today on the back of the attack in Manchester. Most of the European indices lost around 0.2% at the open.
However, the entire indices excluding the Swiss SMI Index have recovered and now are up by more than 0.4%.
The recovery comes on the back of stronger economic releases from all over Europe, including the Manufacturing and Services PMI’s, which showed a solid acceleration in growth.
In return, this would keep the ECB on course to taper the current QE until the end of the year, and might even end the QE before the projected date.
The move that we saw earlier this morning is exactly the same as the one we saw a few months ago, after an attack on the UK parliament.
These events usually have a slight and short-lived negative impact on the markets. Indices would lose some steam for some time, but it usually bounces back the same day of the day after.
Read more: https://www.orbex.com/blog/2017/05/manchester-attack-european-indices-losing-near-0-2-opening/