Asian Shares Fall on Growth Concerns

Asian shares were mostly in the red on Friday, weighed down by a weak performance on Wall Street and doubts about the strength of the U.S. economy, which pushed bonds higher.

Japan’s benchmark Nikkei fell 1.5 percent and regional markets, with the exception of Wellington and Mumbai, were posting losses.

The MSCI’s dollar-denominated index of Asia-Pacific shares outside Japan was down just 0.1 percent as slight gains in some regional currencies offset falls in share prices in local-currency terms.

European shares are expected to stabilise after a fall to one-month lows the previous day, with spreadbetters looking to gains of 0.1 percent in both Germany’s DAX and Britain’s FTSE.

A smaller-than-expected increase in May’s U.S. consumer spending, in data released on Thursday, added to concerns about the health of the U.S. economy following surprisingly weak first quarter GDP data.

The GDP data showed that the U.S. economy contracted at a 2.9 percent annualised pace in the first quarter, the worst performance in five years. Tohru Yamamoto, chief fixed income strategist at Daiwa Securities, called that “clearly a very weak figure.”

The weak data is starting to shake investors’ conviction that the U.S. economy is heading for a modest but robust recovery. U.S. growth this year is seen possibly falling short of 2 percent.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza