Global financial markets weakened once again in afternoon trading on April 15. Japan's Nikkei 225 index, which had risen by 1% in the morning session, saw its gains narrow to less than 0.4% by the close. Similarly, South Korea's stock index trimmed its advance from 3.5% to under 2%. China's A-share market displayed defensive characteristics, with dividend stocks and pharmaceutical shares strengthening while the ChiNext board weakened overall, and declining stocks outnumbered gainers.
In commodities, crude oil stabilized and rebounded after sharp declines the previous night, while gold and other commodities collectively weakened. Concurrently, U.S. stock futures and European equity futures showed signs of疲软. This raises the question: what factors caused market risk appetite to deteriorate again?
The afternoon session brought significant changes following a strong morning performance across global markets, which came after substantial gains in U.S. stocks overnight. Japan's Nikkei index experienced noticeable declines, South Korean equities saw major gains shrink substantially, and virtual currencies weakened across the board. Assets that had fallen sharply yesterday, including crude oil and natural gas, collectively rebounded, while precious metals like gold and silver showed significant weakness.
China's A-share market also witnessed substantial style shifts. Growth stocks generally retreated, with the ChiNext index falling over 1% after having risen more than 1% earlier. Hong Kong-listed AI concept stocks declined in afternoon trading, with some companies dropping over 8% and others falling more than 5%.
Meanwhile, defensive sectors strengthened. China's innovative drug and chemical pharmaceutical sectors continued to gain in the afternoon session, with several pharmaceutical companies rising by the daily limit and others advancing over 10%. Within the dividend sector, banking stocks showed strong performance.
Earlier in the day, a Fox News correspondent posted on social media about interviewing Donald Trump, reporting that he stated conflicts had ended. However, hours later, the correspondent released full dialogue excerpts and video clips clarifying Trump's comments. The complete interview revealed that while Iranian hostilities were nearing conclusion, the U.S. mission remained ongoing, with Trump emphasizing that premature withdrawal would require decades for reconstruction and that negotiations continued.
Additionally, the U.S. blockade of the Strait of Hormuz took effect on the evening of April 13, with reports indicating a U.S. destroyer intercepted two tankers attempting to leave Iran and ordered them to turn back. The vessels were departing from Chabahar port in the Gulf of Oman, with the destroyer establishing radio contact. It remains unclear whether further warnings were issued.
Market Over-optimism? While the Nasdaq's performance has returned to pre-conflict levels, oil prices may require considerable time to recover to previous levels. This raises questions about whether markets have become excessively optimistic.
The International Monetary Fund has downgraded its global economic growth forecast for this year, warning that energy shocks triggered by Middle East conflicts are creating higher uncertainty for the global economy. Under its baseline scenario of relatively brief conflict and moderate energy price increases this year, the IMF projects 2026 global GDP growth at 3.1%, below January's forecast of 3.3%.
The IMF noted that since attacks on Iran began on February 28, the situation has remained highly fluid, leading to three different scenario analyses in its latest report. Should conflicts persist with significant damage to energy infrastructure, the global economy would face more severe downside risks. Under the worst-case scenario, global economic growth could fall below 2%, approaching the IMF's defined recession threshold.
Why then do markets remain resilient? Analysts suggest liquidity factors may be responsible. The Federal Reserve has maintained balance sheet expansion trends this year, with increases exceeding $100 billion. Furthermore, despite ongoing conflicts, the U.S. dollar index has shown clear topping patterns, declining from 100.65 to approximately 98. U.S. 10-year Treasury yields also remain weak. These conditions provide fertile ground for equity markets. From a liquidity perspective, global equity markets may not yet have reached their peak.