Asian markets are largely down after the fall of Wall Street
GLOBAL MARKETS DJIA 32997.97 -1063.09 -3.12% Nasdaq 12317.69 -647.16 -4.99% S&P 500 4146.87 -153.30 -3.56% FTSE 100 7503.27 9.82 0.13% Nikkei Stock 26800.49 -18.04 0.07% Hang Seng 20236.18 -557.22 -2.68% Kospi 2638.58 -38.99 -1.46% SGX Nifty* 16435.50 -255.5 -1.53% *May contract USD/JPY 130.60-61 +0.34% Range 130.80 130.10 EUR/USD 1.0526-29 -0.13% Range 1.0552 1.0518 CBOT Wheat May $10.960 per bushel Spot Gold $1,874.93/oz -0.1% Nymex Crude (NY) $108.28 $0.47 US STOCKS
The stock market has made its biggest turnaround since the early days of the pandemic, with the Dow Jones Industrial Average posting its biggest drop this year just 24 hours after its biggest rise since 2020.
The reversal dashed the euphoria that reigned on Wall Street on Wednesday following Fed Chairman Powell’s comment that the Fed was not “actively” considering raising interest rates by 0.75 percentage points. at a future meeting. With inflation at its highest level since the early 1980s, markets were anticipating such a rise and the prospect of a slower rate hike sparked a furious buying spree late in the afternoon.
The optimism behind this rally has ended and the selling was widespread, although more intense in tech stocks which have fallen on hard times in 2022 after years of leading the market advance.
“The market yesterday was a relief rally,” said Seema Shah, chief strategist at Principal Global Investors. On Thursday, she said, the realities of a tougher environment for equities were starting to set in, including higher rates, tough earnings comparisons and a stronger U.S. dollar weighing on earnings going forward. foreign multinational companies.
The Nasdaq Composite Index fell 5%, the S&P 500 fell 3.6% and the Dow Jones Industrial Average slid 3.1%, erasing Wednesday’s gains. Major indexes hovered between 7.0 and 9.4 percentage points between Wednesday’s highs and session lows, according to Dow Jones Market Data, their biggest swings since the first half of 2020.
Japan’s Nikkei Stock Average fell 0.8% to 26,604.60, weighed by falling electronics and technology stocks, as concerns persisted over rising borrowing and commodity costs . Japanese markets were closed Tuesday through Thursday for public holidays. Profits were the focus. Marubeni Corp. and Hoya Corp. were due to report their results later in the day.
South Korea’s Kospi fell 1.4% to 2640.40 in early trade, dragged down by losses in internet and electronics stocks. Wall Street’s overnight tech tumble weighed on sentiment as investors still weigh the implications of the Fed’s most aggressive rate hike in 22 years to fight inflation on Wednesday. They wonder how far the Fed might raise rates over the next few years and how that might affect the economy and corporate earnings.
Hong Kong’s Hang Seng Index fell 3.1% to 20155.04, led by a sell-off in tech stocks. Chinese tech stocks weakened in the U.S. ADR market in the previous session after the Securities and Exchange Commission added more than 80 Chinese companies to a list of entities subject to delisting, it said. wrote KGI Research analyst Chua Tit Hong in a note. The Hang Seng TECH index fell 4.7% to 4059.74.
Chinese stocks were weaker in early trading, following weakness in regional markets, and as real estate developers and non-ferrous metals weighed. The Shanghai Composite Index was down 1.6% at 3017.62, the Shenzhen Composite Index was down 1.9% and the ChiNext Price Index was down 1.8%.
Asian currencies appeared to be under pressure against the USD amid growing worries about the clouded economic outlook and high inflation, Jeff Ng, senior currency analyst at MUFG Bank, said in a research report. It comes as the Bank of England raised rates and gave a gloomy outlook, expecting GDP to contract in 2023, while inflation remains high. The outlook for today could be greater dollar strength if risk aversion continues, Ng added. USD/KRW was up 0.4% at 1,274.76, USD/SGD gained 0.3% at 1.3882 and USD/CNH was up 0.5% at 6.7177 , while AUD/USD fell 0.2% to 0.7101.
Gold prices were slightly lower at the start of Asian trading. The market appears to have priced in a Fed rate hike cycle and attention is now shifting to recession risks, Stephen Innes, managing partner at SPI Asset Management, said in a research note. He believed that “shallow” hedging demand rather than actual physical demand was a key contributor to the rise in gold prices. “Tangible assets like gold present a hedge against runaway inflation. The implications are that when the Fed finally raises interest rates high enough to stem the growth of inflationary pressures, investors will no longer need these blankets,” he said. Spot gold was down 0.1% at $1,874.93/oz.
Oil prices rose, reversing earlier losses after a volatile Thursday session where crude oil prices closed at the highest levels in nearly three weeks, UOB analysts wrote in a note. Supply issues could continue to be the focus, stemming from the European Union’s proposal to sanction Russian oil within six months, the UOB added. The first-month contract for WTI rose 0.5% to $108.85/bbl, while first-month Brent crude gained 0.6% to $111.57/bbl.
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Corrections & Amplifications
This item was corrected at 0332 GMT to reflect the Nikkei down 18.04 points, or 0.07%, to 26800.49 and the Kospi down 38.99 points, or 1.46%, to 2638, 58. The original version incorrectly listed the Nikkei and Kospi as closed on the charts.
(END) Dow Jones Newswire