Asian markets down on China data, MF Global fall

There’s just no respite from the avalanche of bad news that has had global equity markets in a downbeat mood.

This morning, Asian indices are down after China’s official PMI data - a pulse reading of its manufacturing economy - came in a tick lower than expected, although it still showed expansion.

As at 7.30 am, indices in Japan, Australia, Hong Kong and Seoul are all in the red. Shanghai, though, is up a notch. Overnight, Wall Street too finished sharply down, although it closed a good month.

Markets have a new worry on their minds: the knock-down effect from the fall of MF Global Holdings, the futures brokerage, which filed for bankruptcy overnight. The fear, as some market players have articulated it, is that it could mark a “Lehman moment” - a prequel to a ripple effect across the financial markets. Although those fears seem overstated at the moment, nervousness runs high.

The eurozone deal of last week, which briefly set off a relief rally, is also under a cloud after the Greek prime minister announced a referendum on the rescue package. This has the potential to unravel the entire deal if voters, who are wary of a loss of sovereignty, vote with their feet. Any way you look at it, Europe’s troubles are far from over.

Back in India, all these weak global cues are compounded by weakening economic data, which analysts say isn’t about to improve anytime soon. Although fund managers say they are looking at India in a positive light in the medium term, the overall mood of the market hasn’t quite turned around in any appreciable way.

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