Monday, May 23, 2022

Asian shares fall after retreat on Wall Street | Nation World News

TOKYO ( Associated Press) – Asian stocks traded cautiously on Wednesday. Stocks on Wall Street fell nearly 3% with Tokyo’s Nikkei 225, after falling to a new low for the year.

Shares also dipped in Hong Kong, Shanghai, Seoul and Sydney.

Led the decline in technology stocks on Wall Street on Tuesday. Rising coronavirus infections in Asia, linked to the spread of Omicron, are worrying policymakers. Asian economies have suffered during the pandemic and are struggling to recover.

“The risk-off mood in global markets is being carried over into the Asia session today, as market expectations continue to firm up for a more aggressive Fed,” said Yep Jun Rong, market strategist at IG. Also, the economic momentum can be limited.” in Singapore.

Japan’s benchmark Nikkei 225 fell 2.9% to 27,439.95, its lowest level since August, on heavy selling from big makers such as Toyota Motor Corp, which lost 5%, and Sony Corp, which lost 5% to other tech stocks. Corresponding fell 12.8%.

Australia’s S&P/ASX 200 fell 1.0% to 7,332.50. South Korea’s Kospi fell 0.8% to 2,842.28. Hong Kong’s Hang Seng fell 0.2% to 24,064.48, while the Shanghai Composite fell 0.3% to 3,559.00.

On Wall Street, losses in major indices extended this month as rising inflation and the latest surge in the pandemic prompted investors to caution.

Higher expectations of a rate hike by the Federal Reserve have kept the growth in Treasury yields intact. The 10-year Treasury was steady at 1.87% on Wednesday, the highest since January 2020. It was at 1.77% late on Friday.

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Investors are now pricing in a better than 86% likelihood that the Fed will raise short-term rates at its meeting of policymakers in March. According to CME Group, a month ago, they saw a less than 47% chance of it.

The S&P 500 fell 1.8% to 4,577.11 with nearly 90% of the stocks in the benchmark index closing in the red.

The Nasdaq, which is heavily weighted with technology stocks, fell 2.6% to close at 14,506.90. The Dow Jones Industrial Average fell 1.5% to 35,368.47. A measure of confidence in economic growth, small company stocks also lost ground. The Russell 2000 Index fell 3.1% to 2,096.23.

The Nasdaq has suffered the brunt of the loss this month, falling 7.3%. This puts the index within a 2.7% correction, Wall Street-speak for when a stock or index falls 10% or more from its final peak. The S&P 500 is down nearly 4% for the month after setting an all-time high on the first trading day of the year.

“The 10-year yield continues to be “pricing, higher pricing at the more and more aggressive Federal Reserve,” said Ross Mayfield, investment strategy analyst at Baird. Hadn’t seen the speculation, and now you’re starting to hear that nonsense.”

The Fed is under pressure to reduce inflation, which last month jumped at its fastest pace in nearly 40 years. At the same time, the job market has bounced back, leaving the unemployment rate at a pandemic low of 3.9% last month. This gives the central bank more leeway to rein in the unprecedented support it has been providing to the economy since the pandemic hit.

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Higher rates could help contain inflation, but would also eliminate conditions that have put markets in “easing mode” for many investors since the beginning of 2020.

Higher rates make stocks in high-flying tech companies and other expensive growth stocks less attractive. The sector was the biggest drag on the S&P Tuesday. Apple fell 1.9% and chipmaker Nvidia 3.9%.

Returning investors also reviewed the latest batch of corporate earnings and deal news after US markets closed on Monday for the Martin Luther King Jr. Day holiday. Activision Blizzard soared 25.9% on news of a blockbuster deal. Microsoft, which fell 2.4%, is buying the maker of games like “Call of Duty” and “Candy Crush” for $68.7 billion.

On Wednesday, Bank of America, UnitedHealth and United Airlines reported results. Earnings for American Airlines, Union Pacific and Netflix are due on Thursday.

Benchmark US crude in energy trading rose $1.10 to $86.53 a barrel in electronic trading on the New York Mercantile Exchange. Internationally, Brent crude rose $1.00 to $88.51 a barrel.

In currency trading, the US dollar fell from 114.61 yen to 114.30 yen. The euro rose from $1.1327 to $1.1329.


Nation World News Desk
Nation World News Desk
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