Asian stocks fall as fears of global growth increase

ryanniesMay 19, 2022

Reuters

Stella Qiu and Alun John

Beijing / Hong Kong — Thursday, Asian stocks tracked the plunge on Wall Street, with investors rushing to rising global inflation, China’s Zero-COVID policy, and the Ukrainian War.

MSCI’s widest non-Japanese Asia Pacific stock index recorded a four-day continuous rise, down 2.3%. It was down due to a 1.6% loss on Australia’s resource-intensive index, a 3.3% decline in Hong Kong stocks and a 1% recession. For blue chips in mainland China.

The Nikkei Stock Average in Japan also fell 2.5%.

Hong Kong-listed tech giants were hit hard by a 5% index plunge Thursday morning. Tencent shares, in particular, fell more than 7% after reporting flat earnings growth in the first quarter. This is the worst performance since it was released in 2004.

Despite calm comments from Deputy Prime Minister Liu He to tech executives on Wednesday, China’s tech sector has seen a year-long government crackdown and slowing economic outlook due to Beijing’s strict zero corona policy. I’m still upset.

US and European futures fell Thursday morning.

Earnings reports from retail giants all night on Wall Street added concerns that high inflation would slow global growth, and Target Corp reported that quarterly profits were halved, resulting in higher fuel and fare margins. Warned of rising. One day, Wal-Mart warned about a similar margin squeeze.

Target’s share price plummeted 24.88%, the largest daily percentage drop since 1987. On Wednesday, Nasdaq fell by almost 5% and S & P 500 fell by 4%.

Hebe Chen, a market analyst at IG, said:

“It goes without saying that inflation concerns haven’t disappeared since the beginning of 2022, but we haven’t reached the point where things aren’t coming back, but they’re heading in the direction of’out of control’. There seems to be. That’s probably the most worrying part of the market.

The US dollar, which rebounded due to a diminished desire for risk, suspended its rise on Thursday, with a 0.05% easing of greenbacks against a basket of major currencies. Meanwhile, the Japanese yen fell 0.3% against the dollar.

Data showed on Wednesday that UK inflation surged to its highest annual rate since 1982 as energy bills soared, but Canada’s inflation rate last month was predominantly food and shelter prices. It rose to 6.8% due to the rise in.

Poor U.S. housing data has also been added to concerns about a slowdown, and Federal Reserve Chairman Jerome Powell said yesterday that U.S. financial authorities would push interest rates up as much as necessary to stop the surge in inflation. He said he threatened. Of the economy.

Bilal Hafeez, CEO of London-based research firm MacroHive, said there is now a strong prejudice against safe shelter assets, especially cash.

Huffies told the Reuters Global Market Forum, “Equities can bounce in the short term, as in the last few days, but the big picture is that the era of low yields is over and we’re moving to a higher interest rate environment. “. “This will put pressure on all markets that have benefited from low yields, especially equities.”

US Treasuries rebounded overnight and were largely stable in Asia, with benchmark 10-year Treasury yields remaining at 2.9076%.

The two-year yield, which rises with traders’ expectations of rising federal funds rates, has reached 2.6756% compared to the US closing price of 2.667%.

Crude oil prices rose on Thursday, recovering from initial losses. This is because concerns over tight global supply outweighed concerns about slowing economic growth.

Brent crude rose 1% to $ 110.42 a barrel and US crude rose 0.6% to $ 110.2 per barrel.

Gold was slightly higher and spot gold was trading at $ 1816.29 per ounce.

(Additional report by Divya Chowdhury; edited by Sam Holmes and Kenneth Maxwell)