Asian stocks followed a steep sell-off of Wall Street on Thursday as investors feared rising global inflation, China’s zero-COVID policy and the Ukraine war, while the safe haven dollar held most of its strong gains overnight .
MSCI’s widest index of shares in Asia-Pacific outside Japan fell 2% in early Asian trading hours, the first daily decline in a week.
The Japanese Nikkei dropped 2.4%.
By pulling the army, there was a 1.5% loss for Australia’s resource-heavy index, a 2.6% drop in Hong Kong shares and a 1% decline for blue chips on mainland China.
Overnight on Wall Street, retail giants’ earnings reports soaked up sentiment, with Target Corp warning of a larger margin hit due to rising fuel and freight costs, as it reported halving its quarterly profit.
One day earlier, Walmart Inc. had warned of similar margins.
Target shares fell 24.88%, the largest one-day percentage drop since the “Black Monday” stock market crash on October 19, 1987.
On Wednesday, the Nasdaq fell nearly 5%, while the S&P 500 lost 4%.
“The bounce on Tuesday proved to be ‘too optimistic’, so the self-doubt arising from the mismanagement only makes traders click even harder on the sell button,” said Hebe Chen, market analyst at IG.
“It has to be said that the concern for inflation has never disappeared since we stepped in 2022, however, although things have not reached the point of no return, they are apparently going in the direction of ‘out of control’. That, is probably it most concerned part for the market.
The U.S. dollar, which had rallyed on falling risk appetite, paused its gains on Thursday, with the greenback declining 0.05% against a rate of major currencies.
The Japanese yen, on the other hand, fell 0.2% against the dollar.
British inflation rose to its highest annual rate since 1982, when energy bills rose, while Canadian inflation last month rose to 6.8%, driven in large part by rising food and shelter prices.
Bilal Hafeez, CEO of London-based research firm Macro Hive, said there was currently a strong bias towards assets in safe harbor, particularly cash.
“There may be short-term jumps in equities like the last few days, but the big picture is that the era of low returns is over, and we are moving to an environment with higher rates,” Hafeez told the Reuters Global Markets Forum .
“This will push all markets that benefited from low returns – especially equities.”
US Treasuries ran overnight and were stable in Asia, bringing the benchmark yield to 10-year Treasury notes at 2.8931%.
The two-year yield, which increases with expectations of traders of higher Fed fund rates, reached 2.6715% compared to a US close of 2.667%.
Oil futures were mixed Thursday morning.
U.S. crude fell 0.2% to $ 109.38 a barrel.
Brent crude rose 0.26% to $ 109.4 per barrel.
Gold was slightly lower with the spot price at $ 1,814.8899 per ounce.
Asian stocks fall as fears of global growth mount – SABC News
Source link Asian stocks fall as fears of global growth mount – SABC News