Tokyo, Sep 7 (BNA): Most Asian stocks fell on Wednesday, as pessimism about future interest rate hikes prevailed and Wall Street shares fell for the fourth consecutive week.
Shares slipped in early trading in Tokyo, Sydney, South Korea and Hong Kong, but little changed in Shanghai. Oil prices fell, while the Japanese yen extended its slide against the US dollar to nearly 144 yen.
“The mood in the markets is defensive ahead of major central bank decisions,” said Anderson Alves of ActivTrades.
He said rising energy prices were increasing recession fears in some parts of the world.
In Japan, the government is providing 50,000 yen ($350) to families in need, to help meet daily needs and energy prices in a move also aimed at boosting the underdeveloped economy.
“Obviously the real solution to this inflation crisis lies on the supply side, in terms of energy and other major commodities. However, this really takes us a step away from inflation targeting and back toward an echo of how macro stability was previously,” according to RaboResearch.
Japan’s benchmark Nikkei 225 is down nearly 1.0% in morning trading, to 27362.83. Australia’s S&P/ASX 200 fell 1.3% to 6,735.80. South Korea’s Kospi fell 1.5 percent to 2,373.14. Hong Kong’s Hang Seng fell 1.7% to 18,884.75, while the Shanghai Composite was little changed at 3,243.55.
Stocks fell on Wall Street as a week into the holiday approached. The S&P 500 fell 0.4% after bouncing between a 0.5% gain and a 1% loss. The Dow Jones Industrial Average fell 0.6% and the Nasdaq lost 0.7%.
Major indexes are off their third losing week in a row, part of the late-summer slump that wiped out much of the S&P 500’s gains from July and early August.
The Associated Press (AP) reported that stocks were losing steam as the Federal Reserve signaled that it would not be complacent anytime soon on raising interest rates to bring down the highest rate of inflation in decades.
In addition, Wall Street is grappling with concerns about the escalating energy crisis in Europe and the implications for the global economy and corporate profits, given that those in the S&P 500 get half of their revenue from abroad, said Michael Antonelli, market strategist. in Baird.
“Every day that passes we have to talk about an energy crisis, a shortage of gas or electricity bills out of control in Europe, the ability of the market to make constructive progress decreases,” he said.
The S&P 500 fell 16.07 points to 3,908.19 points. The Dow Jones fell 173.14 points to 31,145.30, while the Nasdaq fell 85.96 points to 11,544.91. Small cap stocks fell more than the broader market. The Russell 2000 Index fell 17.42 points, or 1%, to 1,792.32.
Technology and telecom stocks were among the biggest losers.
Bed Bath & Beyond fell 18.4% after the death of its chief financial officer. The company suffered a prolonged sales slump and executive turnover.
Digital World Acquisition, which wants Trump Media to go public, fell 11.4% after reports it didn’t receive enough shareholder support to extend the deal to seal the deal.
Markets have been sloping in recent weeks as inflation remains hot and the Federal Reserve stays on track to continue raising interest rates in an effort to tame persistently high rates.
“There is somewhat of a consensus now that the Fed will be higher for longer and erring on the side of lowering inflation on employment and growth,” said Mark Hackett, head of investment research at Nationwide.
Bond yields rose. The yield on the 10-year Treasury, which affects interest rates on mortgages and other loans, rose to 3.34% from 3.19% late Thursday. The two-year Treasury yield, which tends to track expectations for the Fed’s action, rose to 3.51% from 3.39%.
In energy trading, benchmark US crude fell $1.52 to $85.36 a barrel. Brent crude, the international benchmark, fell $1.34 to $91.49 a barrel.
In currency trading, the US dollar rose to 143.98 Japanese yen from 142.76 yen. The euro didn’t change much at 99 cents.
HF