As China stock markets close on Thursday, Asian stocks climbed after a sharp sell-off a day earlier. While the U.S. and global stock markets were recovering in early morning trading Wednesday, the dollar remarkably fell.
Due to China's shocking currency devaluation on Aug. 11, the global financial markets have been shaken up, sparking concern that the nation's slowing growth might spread. But now, world stock markets particularly the Asian stocks, have increased after a holiday in China gave investors a break from its fiery markets, The New York Times noted.
The dollar, on the other hand, tumbled on diminishing expectations for a Federal Reserve rate hike, which has been inching toward its first rate hike since the 2008 financial crisis, this month. It has also been getting the investors' attention as its policy meeting set for Sept. 16 to 17 looms. Due to signs of weakening global growth and the turbulent sell-off in Chinese stock markets, market expectations for a September rate hike have decreased.
Fortunately, U.S. stocks rebounded Wednesday, recovering a substantial percentage of their losses a day earlier. According to FOX Business, investors remain cautious after the latest market drop, which was prompted by more signs of China's slowing growth.
"With US stocks rebounding and mild gains from European markets, we could see some wind keeping Asian equities airborne today," IG market strategist Bernard Aw said. "Without China to provide guidance, improved sentiments from the Street would provide trading clues for Asian investors."
As Asian stocks mostly recovered on Thursday, Chinese stock markets closed and will reopen Monday, CNBC reported.
"Away for the Victory Day long weekend today and tomorrow, China's 'bed rest' means that a break from Shanghai stock gyrations will make for much less nail-biting," a Mizuho Bank statement said.
Despite the gains on Thursday, some market analysts remain on the edge as the key stock index remains very delicate, with great chances of more downside risks.
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