Risk aversion psychology spreads in the game stop’short selling war’
Japanese industrial production declined for the second consecutive month
▲ Japanese stock market Nikkei 225 index trend. 29th closing price 22,7663.39 Source Market Watch
On the 29th, Asian stock markets fell all at once due to concerns about volatility from the US. Risk aversion sentiment spread over fears that volatility would increase after the war between ant investors and hedge funds broke out in the New York Stock Market. Japan’s December industrial production, which was announced on this day, fell for the second consecutive month also dampened investment sentiment. The spread of the novel coronavirus infection (Corona 19) remains a market concern.
The Nikkei 225 index on the Japanese stock market fell 1.89% from the previous trading day to 23,7663.39, and the Topics index closed at 1808.78, down 1.64%.
The Shanghai Composite Index on the Chinese stock market closed at 3483.07, down 0.63%, the lowest since the 31st of last month. The Hang Seng index on the Hong Kong stock market fell 0.93% to close at 28,283.71. The Taiwanese Gawon Index fell 1.80% to 11,138.31, the lowest in three weeks.
As of 5:25, the Singapore ST index fell 1.09% to 2888.35, while the Indian stock market Sensex index is trading at 46,644.98, down 0.48%.
In the US New York Stock Market, a war between ants and hedge funds over Game Stop broke out. Gamestop’s stock price fell 44% from the previous trading day due to trading restrictions on stock trading platforms such as Robin Hood and TD Ameritrate. Hedge funds can be sold and bought, but individual investors can only sell.
At the news of the transaction restrictions, not only individual investors but also politicians were angry with the announcement of hearings related to short selling and hedge funds. Then Robin Hood announced that it would resume stock trading from that day, and GameStop’s stock price rebounded nearly 70% in overtime trading.
Nippon Geizai Shimbun (Nikkei) explained, “As Asian major indices approached their new point, alert sentiment was widespread, and as the volatility caused by speculative trading worsened, the selling tax was inflow.”
Industrial production, reflecting Japanese economic trends, fell for the second consecutive month. Industrial production in December 2020, announced by the Ministry of Economy, Trade and Industry of Japan on that day, recorded 93.2, a 1.6% decrease from the previous month. However, industrial production in the fourth quarter of last year rose 6.2%, showing an uptrend for the second consecutive quarter.
The COVID-19 mutant virus, which was discovered in South Africa and spread around the world, is highly contagious and has not been proven effective in vaccines, raising concerns. In the United States, the first South African mutant virus case was reported in South Carolina the day before.
NovaVax’s COVID-19 vaccine was effective against mutant viruses from the UK, but less effective against mutant viruses from South Africa. NovaVax said its vaccine has 89.3% preventive effect against existing viruses and 85.6% against mutant viruses originating in the UK, but only 60% against mutations originating in South Africa. “We’re still trying to recover from Corona 19,” said Stephen Innes Axikov, chief strategist. “It’s much tougher than expected.”