China banking worries weigh on markets
LONDON: Worries over the Chinese banking sector weighed on markets Wednesday, a day after weak US jobs data reinforced expectations that the Federal Reserve won't be reducing its monetary stimulus anytime soon.
Tuesday's news that the US generated only 148,000 jobs in September, below the consensus among analysts for around 180,000, prompted stocks in Europe and the US to rally. However, that momentum came to a grinding halt during the Asian trading session amid concerns over the bad loans that are being written off by China's largest banks.
"This has reignited fears over China's shadow banking system and whether the People's Bank of China will be forced to raise interest rates in order rein in it," said Craig Erlam, market analyst at Alpari. "If we do see a tightening of monetary policy, it could choke off the recovery being seen in the world's second largest economy, which in turn would impact growth globally."
Tuesday's news that the US generated only 148,000 jobs in September, below the consensus among analysts for around 180,000, prompted stocks in Europe and the US to rally. However, that momentum came to a grinding halt during the Asian trading session amid concerns over the bad loans that are being written off by China's largest banks.
"This has reignited fears over China's shadow banking system and whether the People's Bank of China will be forced to raise interest rates in order rein in it," said Craig Erlam, market analyst at Alpari. "If we do see a tightening of monetary policy, it could choke off the recovery being seen in the world's second largest economy, which in turn would impact growth globally."
NAME-
SARVESH KUMAR SINGH
PGDM 1st SEM
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