Asian stocks follow Wall St down as rate hike worries grow

Beijing, May 6 (BNA): Asian stocks followed Wall Street lower Friday as fears spread that raising US interest rates to combat inflation could halt economic growth.

Shanghai, Hong Kong, Seoul and Sydney prices fell. Tokyo prices rose as trading resumed after a holiday, according to the Associated Press.

Wall Street’s benchmark S&P 500 fell 3.6% Thursday, posting its biggest one-day loss in two years as the optimism that drove the previous day’s rally evaporated.

Investors are concerned about whether the Federal Reserve, which raised its key interest rate by half a percentage point on Wednesday, can cool inflation without pushing the sluggish US economy into recession.

Traders are temporarily encouraged by Chairman Jerome Powell’s comment that the Fed is not considering larger increases.

Seoul’s Kospi fell 1.3% to 2,642.26 and Sydney’s S&P-ASX 200 fell 2.3% to 7,197.40. New Zealand and Singapore also declined.

Also on Thursday, the Bank of England raised its benchmark interest rate to a 13-year high, its fourth hike since December, to calm British inflation that is at a 30-year high.

The S&P 500 fell 3.6% to 4,146.87, giving up Wednesday’s 3% increase.

The Dow Jones Industrial Average lost 3.1% to 32,997.97. The Nasdaq, which is dominated by technology stocks, fell 5% to 12,317.69.

The US government was due to release employment figures on Thursday, a closely watched data point.

Economists at BNP Paribas still expect the Fed to continue raising the federal funds rate until it reaches a range of 3% to 3.25%, up from zero to 0.25% earlier this year.

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The benchmark US crude rose 77 cents to $109.03 in electronic trading on the New York Mercantile Exchange. The contract rose 45 cents to $108.26 on Thursday. Brent crude, the price basis for international oil trade, rose 75 cents to $111.65 a barrel in London.

The dollar rose to 130.47 yen from 130.40 yen on Thursday. The euro rose to $1.0539 from $1.0519.

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