Home Business Asian shares are lower after the latest volatile session on Wall Street

Asian shares are lower after the latest volatile session on Wall Street

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TOKYO (AP) — Asian stocks were mostly lower on Wednesday after another volatile day on Wall Street as traders braced for fresh data on inflation and corporate earnings.

Indicators fell in Tokyo
NIY00,

Shanghai
CN:SHCOMP

and Hong Kong
HSI00

but rose in Sydney.

South Korean Kospi
KR:180721

lost 0.1% to 2,189.86 after the Bank of Korea raised its key rate by 0.5 percentage point amid a U.S. Fed rate hike and rising inflation risks due to a weak won and recovery in global oil prices.

In currency trading, the Japanese yen fell to a 24-year low against the US dollar
JPYUSD

at 146 yen, raising expectations of another intervention by Tokyo to support the yen. A dollar by noon
USDJPY

was 146.17 yen, compared with 145.80 on Tuesday evening. Euro
EURUSD

was 96.96 cents, down from 97.07 yen.

A weaker yen raises costs for both consumers and businesses that rely on imports for food, fuel and other necessities, but the greater purchasing power of foreign currencies is expected to boost tourism. Japan fully reopened to individual tourist travel this week after being closed for more than two years due to the pandemic.

Japan’s benchmark Nikkei 225 index lost 0.2% to 26,348.73 in morning trading. Australian S&P/ASX 200 index
AU:ASX10000

up nearly 0.2% to 6,656.00. Hong Kong’s Hang Seng fell 2% to 16,491.39, while the Shanghai Composite fell 1.2% to 2,943.24.

The S&P 500 on Tuesday
SPX

fell 0.7%, marking its fifth straight loss, to close at 3,588.84. Nasdaq
COMP

fell 1.1% to 10,426.19. Dow Jones industrial index
DJIA

added 0.1% to 29,239.19, while the Russell 2000 index
TRACK

rose 1 point, or about 0.1%, to 1,692.92.

Recession fears are weighing heavily on markets as stubbornly hot inflation burns businesses and consumers. Economic growth is slowing as consumers hold back spending and the Federal Reserve and other central banks raise interest rates.

International Monetary Fund on Tuesday lowered the global economic growth forecast in 2023 to 2.7%, compared with 2.9% estimated in July. The cuts come at a time when Europe faces a particularly high risk of recession with energy costs soaring amid Russia’s invasion of Ukraine.

See: Global economy most vulnerable since COVID crisis, with housing market at potential ‘tipping point’, IMF warns

Wall Street is closely watching the Federal Reserve, which continues to aggressively raise the benchmark interest rate to make borrowing more expensive and slow economic growth. The goal is to cool inflation, but the strategy carries the risk of slowing the economy too much and pushing it into recession.

“The market is desperate for a reason for the Fed to stop tightening, and recent data hasn’t given them that revelation on inflation,” said Willie Delwich, investment strategist at All Star Charts.

Manufacturers of computer microcircuits continued to slide due to the US government’s decision to tighten controls on exports of semiconductors and chip-making equipment to China. Qualcomm
QCOM

decreased by 4%.

See: Intel is reportedly planning to cut thousands of jobs, with details likely to emerge alongside quarterly earnings

Uber
UBER

down 10.4% and Lyft
ELEVATOR

fell by 12%. a U.S. government proposal that would give contract workers in tour operators and other economy-based businesses full employee status.

Fed will publish the minutes of the last meeting on Wednesday, which may give Wall Street more clarity on its views on inflation and next steps.

Investors still expect the Fed to raise the overnight rate by three-quarters of a percentage point next month, the fourth such hike. This triples the usual amount and will bring the rate to the 3.75% to 4% range. The year started almost from scratch.

Rex Nutting: Leading indicators show inflation slowing, but Fed policymakers are too busy looking in the rearview mirror to notice

The government will also release its wholesale prices report on Wednesday, providing an update on how inflation is hitting businesses. The consumer price report will be released on Thursday and the retail sales report on Friday.

“Everybody is still hoping that every inflation report will show that the pressures are easing,” Delwich said.

Wall Street is also preparing for the start of the latest season of corporate earnings reports, which could provide a clearer picture of the impact of inflation.

Among the companies reporting quarterly results this week: PepsiCo
PEP,

Delta Air Lines
DAL

and Domino’s Pizza
DPP.

Banks, including Citigroup
S

and JPMorgan Chase
JPM

will also report the results.

In energy trade, the benchmark is US crude oil
CL00

in electronic trading of the New York Mercantile Exchange fell by 82 cents to 88.53 dollars per barrel. Oil prices in the US fell 2% on Tuesday. Brent oil
BRN00,

in international pricing standards decreased by 62 cents to 93.67 dollars per barrel.

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