Beijing, Sept. 23 (BNA): Asian stocks fell for a third day on Friday after the Federal Reserve and other central banks raised interest rates to control persistent inflation, raising fears of a possible global recession.
Shanghai, Hong Kong, Seoul and Sydney prices fell. Oil prices fell. Japanese markets were closed for a holiday, according to the Associated Press.
The benchmark S&P 500 index fell on Wall Street Thursday for a third day after interest rate increases by the central banks of Britain, Switzerland, Turkey and the Philippines. The Fed raised its key interest rate on Wednesday for the fifth time this year and indicated more hikes are on the way.
The Shanghai Composite fell 0.3% to 3,098.87 and Hong Kong’s Hang Seng lost 0.3% to 18,085.72. The Kospi index in Seoul fell 1.5% to 2296.39.
The S&P-ASX 200 index in Sydney fell 1.7% to 6,588.10. New Zealand and Southeast Asia markets fell.
The S&P 500 lost 0.8% to 3,757.99. The Dow Jones Industrial Average fell 0.4% to 30,076.68 and the Nasdaq Composite fell 1.4% to 11,066.81.
The sell-off reflects investor concerns that the Fed and other central banks may be willing to tolerate a deep slowdown in economic activity to control prices.
Some indications are that the US economy is cooling as the Federal Reserve supports it to backtrack on plans to raise interest rates further. But President Jerome Powell said on Wednesday that the Fed would keep interest rates high for an extended period if necessary to bring inflation back to its 2% target.
US consumer price inflation eased to 8.3% in August from the previous month’s peak of 9.1%. But core inflation, which strips out volatile food and energy prices to give a clearer picture of the trend, rose to 0.6% from the previous month, up from 0.3% in July. This indicates that the pressure on prices to rise remains strong.
The Federal Reserve on Wednesday raised the benchmark interest rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It released forecasts showing it expects the record rate to be 4.4% by the end of the year, a full point higher than forecast in June.
Traders are also looking forward to the quarterly financial results from major companies.
In energy markets, US crude lost 21 cents to $83.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 55 cents to $83.49 on Thursday.
Brent crude, used in international oil pricing, fell 28 cents to $89.25 a barrel in London. It rose 63 cents in the previous session to $90.46.
The dollar fell to 142.01 yen from 142.49 yen. The euro fell to 98.28 cents from 98.31 cents.
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