Asian shares sharply lower after wobbly day on Wall Street

Tokyo, Sept. 28 (BNA): Asian stocks fell on Wednesday, after a volatile day ended with mixed results on Wall Street as markets fluctuated on the prospect of a possible recession.

The Nikkei 225 in Tokyo fell 2.2% to 25,984.51 while the Kospi in Seoul lost 2.8% to 2,161.86. In Sydney, the S&P/ASX 200 slipped 0.8% to 6443.30.

Hong Kong’s Hang Seng fell 2.1% to 17483.89 and the Shanghai Composite fell 0.8% to 3,068.59. Taiwan’s benchmark index fell 2.1%.

The week began with heavy selling that sent the Dow Jones Industrial Average into a bear market, joining other major US indices, according to the Associated Press (AP).

On Tuesday, the S&P 500 fell 0.2% to 3647.29, its sixth consecutive loss. The Dow Jones fell 0.4% to 29134.99, while the Nasdaq Composite rose 0.2% to close at 10,829.50.

Small cap stocks have held up better than the broader market. The Russell 2000 Index rose 0.4% to close at 1,662.51.

The main indicators are still in an extended recession. With only a few days left in September, stocks are headed for another month of losses as markets fear high interest rates used to fight inflation could push the economy into recession.

The S&P 500 fell nearly 8% in September and has been in a bear market since June, when it fell more than 20% from its all-time high on January 4. As a benchmark and high-tech Nasdaq.

Central banks around the world have been raising interest rates in an effort to make borrowing more expensive and cool the hottest inflation in decades. The Federal Reserve was particularly aggressive and raised its benchmark rate, which affects many consumer and business loans, again last week. It now falls in the range of 3% to 3.25%. It was almost zero at the start of the year.

The Fed also released forecasts that the benchmark interest rate could reach 4.4% by the end of the year, a full percentage point higher than was projected in June.

Wall Street is concerned that the Fed will hit the brakes hard on an already slowing economy and turn it into a recession. Higher interest rates have affected stocks, especially more expensive technology companies, which tend to look less attractive to investors as interest rates rise.

Energy stocks rose as US oil prices rose 2.3%. Exxon Mobil shares rose 2.1 percent.

Bond yields were mostly higher on Tuesday. The yield on the two-year Treasury, which tends to follow expectations of Fed action, fell to 4.31% from 4.34% late Monday. It is trading at its highest level since 2007. The yield on 10-year Treasury notes, which influences mortgage rates, rose to 3.98% from 3.93%.

Investors will be watching the next round of corporate earnings closely to get a better idea of ​​how companies are dealing with inflation. Companies will start reporting their latest quarterly results in early October.

Consumer confidence remains strong, despite rising prices for everything from food to clothing. The latest consumer confidence report for September from The Conference Board showed that confidence was stronger than economists had expected.

The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on second-quarter gross domestic product. On Friday, the government will release another report on personal income and spending that will help provide more details on where and how inflation affects consumer spending.

In other trading on Wednesday, US crude lost $1.15 to $77.35 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, used in global oil pricing, fell $1.26 to $83.61 a barrel in London.

The dollar fell to 144.65 yen from 144.81 yen. The euro was 95.59 cents, down from 95.92 cents.

HF