TOKYO, April 25 (BNA) Asian stocks fell on Monday after US stocks closed lower last week as global market expectations of higher interest rates continued to set the trend.
Japan’s Nikkei 225 lost 1.9% in morning trading to 2,6583.70. South Korea’s Kospi index fell 1.6 percent to 2,661.94 points. Hong Kong’s Hang Seng fell 2.8% to 20,064.32, while the Shanghai Composite fell 2.4% to 3,012.93. Trading in Australia has been closed due to Anzac Day, a national holiday, the Associated Press reported.
News that Emmanuel Macron won the run-off in the French presidential election at the weekend, sealing a second term as widely expected, reassured markets that France would not suddenly change course in the midst of the war in Ukraine.
But analysts said an important presentation by rival Marine Le Pen, a populist and nationalist, was a reminder of how fragile the situation is. Le Pen has vowed to scale back France’s relations with the European Union, NATO and Germany, and has spoken out against EU sanctions on Russian energy supplies.
The rise in COVID-19 cases in China is raising concerns about further pandemic lockdowns that would hamper the region’s economic recovery. Other countries are also dealing with economic problems related to COVID-19, such as the lack of tourism revenue in Japan, where cases are still rising and falling as they gradually open their borders, but only for business travelers.
Investors are also watching earnings reports from companies, including Japanese big names to be released in the coming weeks. Several reports from US companies, which have already been released, were disappointing, contributing to the decline that ended last week on Wall Street.
What the US Federal Reserve might do is on the minds of investors. The Fed chair indicated that the central bank may raise short-term interest rates by twice the usual amount in the upcoming meetings, which begin in two weeks. The Fed has already raised its key rate overnight once, the first such increase since 2018.
The S&P 500 fell 2.8% on Friday to 4,271.78, posting its third consecutive weekly loss. The Dow Jones Industrial Average fell 2.8% to 33811.40, its biggest drop in 18 months. The Nasdaq lost 2.6% to close at 12839.29. The Dow and Nasdaq also incurred losses for the week.
Shares of smaller companies also fell sharply. Russell 2000 fell 2.6% to 1,940.66.
“Following the heavy sell-off on Wall Street ending last week, overall risk appetite in the region may come under pressure as well,” said Yeap Jun Rong, market strategist at IG in Singapore.
Markets around the world are feeling similar pressure on prices and inflation, especially in Europe where the war in Ukraine has driven up oil, gas and food costs.
In energy trading, US crude lost $2.91 to $99.16 a barrel in electronic trading on the New York Mercantile Exchange. International benchmark Brent crude fell $2.93 to $103.72 a barrel.
In currency trading, the US dollar fell to 128.51 Japanese yen from 128.59 yen. The price of the euro was 1.0789 dollars, down from 1.0803 dollars.