Asia stocks joined Wall Street’s selloff on Friday as investors fretted over slowing growth in Europe. Energy-related shares led the declines in the region after Brent crude dropped below $90 a barrel for the first time since 2012 and U.S. crude hitting a 22-month low.
Data showing German exports dropped 5.8 percent in August, the largest decline since the financial crisis, saw the Dow tumble more than 300 points overnight, while the S&P 500 and Nasdaq slid more than 2 percent each. Remarks from European Central Bank (ECB) President Mario Draghi also weighed. Speaking at the Brookings Institute, he reiterated that quantitative easing would not be effective without economic reforms and warned of deflation risks.
“Germany’s August export crash reinforced the IMF’s message that the odds of the euro zone slipping back into recession had doubled to nearly 40 percent. A third recession since the global financial crisis would raise the question, is recession the new normal?” said Tim Condon, head of Asia research at ING.
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