TOKYO ( Associated Press) – Shares fell in most Asian markets on Monday as interest rates hiked and a slowing Chinese economy weighed on investor sentiment.
Oil prices were higher and US futures fell after a sharp drop on Wall Street last week.
Benchmarks across the region declined. Jakarta’s benchmark fell 4%.
Market players were waiting for Chinese trade data for April for an indication of how much the restrictions to curb the spread of COVID-19 infections have hit the economy.
“The global investment community is slowly waking up to the idea we have long touted: that there is a post-COVID-recovery-euphoria ‘hangover’, coupled with associated inflation and now a European war and There is also the latest inflationary stimulus. The world’s largest port is being shut down,” said Clifford Bennett, chief economist at ACY Securities.
Japan’s benchmark Nikkei 225 ended 2.2% lower at 26,410.30 in morning trade. South Korea’s Kospi fell 0.9% to 2,621.24. Australia’s S&P/ASX 200 fell 1.3% to 7,110.50. The Shanghai Composite was little changed at 3,001.62, down less than 0.1%. Markets remained closed in Hong Kong for a national holiday.
Investors are watching the results of the presidential election in the Philippines, although it is unclear how economic policies may change. Based on most voter-preference polls, the son of long-overthrown Philippine dictator Ferdinand Marcos is the top contender in Monday’s vote.
In addition to concerns about inflation and coronavirus sanctions, the war in Ukraine There is still a major cause for uncertainty. Ukrainian officials say more than 60 people are feared dead in a Russian bombing at a school being used as a shelter. Moscow’s army launched its attack on defenders inside Mariupol’s steel plant in an apparent race to capture the city ahead of Russia’s Victory Day holiday on Monday.
“Russia’s Victory Day today will also bring geopolitical risks back into the limelight. President Putin is likely to reiterate his justification for the Ukraine war, but any further attempts to intensify military operations to secure a market war Can watch for,” said Yep Jun Rong, market strategist at IG in Singapore.
Shares closed lower on Wall Street on Friday, marking the fifth consecutive weekly decline in the market. There are growing concerns that despite strong US employment trends, the Federal Reserve’s efforts to contain inflation Raising interest rates could send the US economy into recession.
The Fed’s key short-term rate hike on Wednesday raised it 0.5 percentage points to 1% from 0.75%, the highest level since the pandemic two years ago.
The S&P 500 fell 0.6% to close at 4,123.34. The Dow fell 0.3% to 32,899.37. The Nasdaq closed down 1.4% at 12,144.66. Smaller companies declined more than the broader market. The Russell 2000 closed down 1.7% at 1,839.56.
The Fed is hoping to raise rates and slow the economy to the highest inflation rate in four decades, but it stifles growth if it moves too far or too quickly. Fed Chairman Jerome Powell has reassured investors, saying the central bank was not “actively considering” an even bigger jump of 0.75 percentage points at its next meeting.
Benchmark US crude in energy trading rose 43 cents to $110.20 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for oil’s pricing for international trade, rose 77 cents to $113.16 a barrel.
In currency trading, the US dollar rose from 130.55 yen to 130.98 yen. The Euro is priced at $1.0510, which is less than $1.0545.