Global Factors influencing ASX stocks on 16 August 2023

On 16 August 2023, at AEST 11:30 AM, the benchmark index S&P/ASX 200 is trading lower today, declining 87.40 points or 1.20%, and is currently trading at 7,217.60 levels. All 11 sectors are trading lower along with the S&P/ASX 200. The Materials and Financial sectors were the top 2 declining sectors, down by 1.06% and 1.02% in their index values.

Also read: Mid-Market: S&P/ASX 200 Sharply Lower By 1.29%; Mirroring US Market

On that note, let us look at a few global reasons impacting the stock market today:

1. Some of the key U.S. indices ended lower in their previous session. NASDAQ Composite, NASDAQ-100, S&P 500, and Dow jones ended lower by 1.14%, 1.10%, 1.16%, and 1.02% respectively.

2. In a preliminary report on Tuesday, the American Petroleum Institute (API) indicated that U.S. crude oil inventories likely experienced a decrease of approximately 7 million barrels in the past week. Alongside this, there were apparent shortfalls in distillates, but an increase in gasoline stockpiles. These developments coincide with substantial production reductions implemented by Saudi Arabia. These insights come in advance of the official inventory data release.

3. On Tuesday, the primary stock indices of Wall Street concluded the trading session with significant declines. This came as robust retail sales data, surpassing expectations, raised concerns that interest rates might remain elevated for an extended period. Simultaneously, prominent U.S. banking institutions faced losses following a report indicating the possibility of a downgrade by Fitch Ratings for certain lenders.

4. The economic activity data for July from China, encompassing metrics like retail sales, industrial output, and investment, fell short of anticipated levels. This has sparked worries about the potential for a more profound and prolonged deceleration in the country's economic growth.

5. The Hang Seng and FTSE 100 is down by 1.03% and 1.57%.

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