Asian equities have followed Wall Street lower as fears spread that US rate hikes to curb inflation could halt economic growth
BEIJING ̵[ads1]1; Asian equities followed Wall Street lower on Friday as fears spread that US interest rate hikes to fight inflation could stop economic growth.
Shanghai, Hong Kong, Seoul and Sydney went down. Tokyo rose higher as trade resumed after a holiday.
Wall Street’s benchmark index S&P 500 plunged 3.6% on Thursday for its biggest one-day loss in two years as the optimism that drove the day before the rally disappeared.
Investors worry about whether the Federal Reserve, which raised its key interest rate by half a percentage point on Wednesday, could cool inflation without tipping the declining US economy into recession. Traders were temporarily encouraged by Chairman Jerome Powell’s comment that the Fed did not consider even larger increases.
“It is clear that investors had different thoughts about the so-called ‘pigeon rise’ from the Fed,” Rob Carnell of ING said in a report.
The Shanghai Composite Index fell 1.6% to 3,019.11 and Hong Kong’s Hang Seng plunged 3.6% to 20,051.61. The Nikkei 225 in Tokyo increased 0.9% to 27,053.81.
Kospi in Seoul fell 1.3% to 2,642.26 and Sydney’s S & P-ASX 200 fell 2.3% to 7,197.40. New Zealand and Singapore also declined.
Russia’s war on Ukraine, high oil prices and global supply chain disruptions are increasing investor unrest.
Also on Thursday, the Bank of England raised its reference rate to its highest level in 13 years, the fourth increase since December to cool British inflation, which is at its 30-year high.
The S&P 500 fell 3.6% to 4,146.87, giving back Wednesday’s 3% increase.
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 was to report employment figures on Thursday, a closely monitored data point.
Economists at BNP Paribas still expect the Fed to continue raising federal fund interest rates until it reaches a range of 3% to 3.25%, up from zero to 0.25% earlier this year.
Energy markets remain volatile as the conflict in Ukraine continues, and demand remains high due to tight 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 flows of crude oil they send to the world.
Benchmark US crude rose 77 cents to $ 109.03 in online trading on the New York Mercantile Exchange. The contract rose 45 cents to $ 108.26 on Thursday. Brent oil, 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 Thursday’s 130.40 yen. The euro rose to $ 1.0539 from $ 1.0519.