Asian stocks have followed a downturn in Wall Street as fears spread that rising US interest rates to curb inflation could halt economic growth.
By JOE McDONALD AP Business Writer
6 May 2022, 04:34
• 3 minutes of reading
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BEIJING – Asian stocks followed a downturn in Wall Street on Friday as fears spread that rising US interest rates to curb inflation could halt economic growth.
Shanghai, Hong Kong, Seoul and Sydney refused. Tokyo rose after trade resumed after a vacation.
Wall Street’s S&P 500 benchmark fell 3.6 percent on Thursday for its biggest one-day loss in two years as the optimism sparked by the previous day’s rally evaporated.
Investors are worried that the Federal Reserve, which raised its key interest rate by half a percentage point on Wednesday, could cool inflation without driving the slowing US economy into recession. Traders were temporarily encouraged by President Jerome Powell’s comment that the Fed was not considering further increases.
“It is clear that investors have thought about the so-called ‘blue rise’ from the Fed,” said Rob Carnell of ING in a report. The “rise in interest rates is likely to come sharply and quickly, but little, if any, at all.”
The Shanghai Composite Index fell 1.6% to 3,019.11 and Hong Kong’s Hang Seng fell 3.6% to 20,051.61. The Nikkei 225 in Tokyo added 0.9% to 27,053.81.
Kospi in Seoul fell 1.3% to 2,642.26 and the S & P-ASX 200 in Sydney fell 2.3% to 7,197.40. New Zealand and Singapore also refused.
Russia’s war against Ukraine, high oil prices and disruptions in the global supply chain are worrying investors.
Also Thursday, the Bank of England raised its benchmark interest rate to its 13-year high, its fourth increase since December to cool Britain’s 30-year high.
The S&P 500 fell 3.6% to 4,146.87, returning 3% from Wednesday.
The Dow Jones Industrial Average lost 3.1% to 32,997.97. Nasdaq, dominated by technology stocks, fell 5% to 12,317.69.
The US government had to report the number of employees on Thursday, a closely monitored data point.
Economists at BNP Paribas still expect the Fed to continue raising interest rates on federal funds until it reaches a range of 3% to 3.25%, from zero to 0.25% earlier this year.
Energy markets remain volatile as the conflict in Ukraine continues and demand remains high amid limited oil supplies. European governments are trying to replace energy supplies from Russia and are considering an embargo. OPEC and allied oil-producing countries decided on Thursday to gradually increase the flow of crude oil they send to the world.
The reference US crude oil rose 77 cents to $ 109.03 in e-commerce on the New York Mercantile Exchange. The contract rose 45 cents to $ 108.26 on Thursday. Brent crude, the price base for international oil trade, rose 75 cents to $ 111.65 a barrel in London.
The dollar rose to 130.47 yen from 130.40 yen on Thursday. The euro rose to $ 1.0539 from $ 1.0519.
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