BEIJING (AP) – Asian stocks followed Wall Street on Friday as fears spread that rising US interest rates to fight inflation could slow economic growth.
Shanghai, Hong Kong, Seoul and Sydney refused. Tokyo rose when trading resumed after the holiday.
The base index of the S&P 500 on Wall Street fell 3.6% on Thursday, the biggest one-day loss in two years as the optimism that sparked the previous day’s rally evaporated.
Investors are worried about whether the Federal Reserve, which on Wednesday raised its key interest rate by half a percentage point, could cool inflation without turning the US economy, which is slowing down, into a recession. Traders were temporarily encouraged by Chairman Jerome Powell’s comment that the Fed is not considering an even bigger raise.
“Obviously, investors are thinking about the so-called” pigeon campaign “by the Fed,” said Rob Cornell of ING in a report. The likelihood is that “the rate hike will be significant and rapid, but the prospects for a return to inflation in the near future will be virtually non-existent.”
The Shanghai Composite Index fell 1.6% to 3,019.11, while Hong Kong’s Hang Seng fell 3.6% to 20,051.61. The Nikkei 225 in Tokyo increased 0.9% to 27,053.81.
The Kospi in Seoul fell 1.3% to 2,642.26, and the Sydney S&P-ASX 200 fell 2.3% to 7,197.40. New Zealand and Singapore also refused.
Russia’s war with Ukraine, high oil prices and disruptions in global supply chains are adding concern to investors.
Also Thursday, the Bank of England raised its base rate to its highest level in 13 years, its 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, up 3% on Wednesday.
The Dow Jones Industrial Average lost 3.1% to 32,997.97. Nasdaq, dominated by technology stocks, fell 5% to 12,317.69.
The U.S. government was due to report employment figures Thursday, closely monitoring the data.
Economists at BNP Paribas continue to expect the Fed to continue raising rates on federal funds until it reaches a range of 3% to 3.25%, from zero to 0.25% earlier this year.
Energy markets remain volatile as the conflict in Ukraine continues and demand remains high amid limited oil supplies. European governments are trying to replace energy supplies from Russia and are considering imposing an embargo. OPEC and allied oil-producing countries decided on Thursday to gradually increase the flow of oil they send to the world.
In electronic trading on the New York Mercantile Exchange, U.S. benchmark oil rose 77 cents to $ 109.03. On Thursday, the contract rose 45 cents to $ 108.26. Brent crude, which is the basis of the price for international oil trade, rose in London by 75 cents to $ 111.65 per barrel.
The dollar rose to 130.47 yen from 130.40 yen on Thursday. The euro rose to $ 1.0539 from $ 1.0519.
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