Asian stock markets are divided following a little decline on Wall Street amid concerns that rising interest rates may slow down world economic growth.
(AP) BEIJING — Asian stock markets were divided on Thursday as Wall Street dipped over concerns that rising interest rates may slow down the expansion of the world economy.
Tokyo and Seoul dropped, while Shanghai and Hong Kong advanced. Over $2 per barrel was lost, bringing oil prices to almost $100.
Speaking to members of Congress on Wednesday, Federal Reserve Chair Jerome Powell said that while the U.S. central bank doesn’t need to “provoke a recession,” one is possible as a result of rate increases to curb inflation, which is near four-decade highs.
The benchmark S&P 500 index on Wall Street dropped by 0.1% after fluctuating throughout the day between gains of 1% and losses of 1.3%.
According to Michael Every of Rabobank, “the market now recognizes recession as a risk, having been in utter denial.”
The Nikkei 225 in Tokyo fell 0.3% to 26,059.39, while the Shanghai Composite Index increased 0.6% to 3,285.99. Hong Kong’s Hang Seng increased by 1% to 21,209.09.
While Sydney’s S&P-ASX 200 increased 0.2% to 6,523.50, the Kospi in Seoul fell 1.5% to 2,308.20. Singapore, Bangkok, and New Zealand made progress while Jakarta lost ground.
The United States and Europe’s central banks are working to reduce the four-decade-high inflation rate.
Investors fear that will stall global economic expansion. Speaking before the Senate Banking Committee, Powell acknowledged the risks but insisted that the Fed’s restoration of price stability is “very necessary.”
According to research by Capital Economics’ Jennifer McKeown, “we now predict the most aggressive and synchronized tightening cycle” by international central banks since the 1980s. What could stop central banks from applying the brakes is the important question at this point, not whether they will do so.
The S&P 500 fell to 3,759.89 points. Gaining and losing stocks were split equally among those in the index.
To 30,483.13, the Dow Jones Industrial Average lost 0.2%. To 11,053.08, the Nasdaq composite fell 0.2%.
The S&P 500 dropped more than 20% from its peak on Jan. 3 and is therefore in a bear market. In ten of the previous eleven weeks, it has declined.
The Federal Reserve increased its benchmark rate by three-quarters of a percentage point last week, which was the largest increase in nearly three decades and three times its average margin.
The Fed’s decision-makers say they expect rates to rise more frequently than previously predicted this year and next. They predict that by the end of 2023, the main rate of the central bank would have risen to 3.8%, its highest level in 15 years.
In the world’s largest market, the United States, rising prices have lowered consumer confidence. Retail sales are declining.
Fears of inflation have been made worse by a rise in the cost of commodities like wheat and oil as a result of Russia’s invasion of Ukraine.
Wednesday saw another steep decline in oil prices, indicating that traders expect reduced demand as the economy slows.
On the New York Mercantile Exchange, benchmark U.S. crude fell $2.68 to $103.51 a barrel in electronic trading. On Wednesday, the contract decreased from $3.33 to $106.19. The benchmark price for global trade, Brent crude, dropped $2.43 to $106.22 per barrel in London. It dropped from $3.12 to $108.65 in the last session.
From 136.28 yen on Wednesday, the dollar decreased to 135.34 yen. The euro increased from $1.0566 to $1.0570.
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