Asian markets broadly lower as traders focus on further monetary tightening

Reflections of pedestrians are seen on a screen displaying the Hang Seng Stock Index in Hong Kong, China, Aug 5, 2019. — Reuters pic

Wednesday, August 31, 2022 16:51 MYT

HONG KONG, Aug 31 — Most Asian markets resumed their downtrend today. Traders fear the world’s top economies will plunge into recession as the Federal Reserve (Fed) decides to beat inflation with higher interest rates.

Global equities rebound from June lows after Fed President Jerome Powell warned last week that the Fed needs to tighten policy further to succeed in fighting prices, making investors worried Disappearing from home again.

Wall Street’s three major indexes fell for a third day in a row yesterday, hitting one-month lows. Healthy data on US consumer sentiment and job openings show the economy remains resilient despite recent rate hikes and his highest inflation in 40 years.

However, analysts said the figure was a case of good news being bad news as it allowed the Fed to stick to its plan to raise borrowing costs even further. A three-quarter point increase in a row is expected.

Traders await tomorrow’s release of US job creation figures for a better idea of ​​the state of the economy.

But commentators said the coming months would be difficult to predict given inflation and rate hikes, as well as issues such as the war in Ukraine, geopolitical tensions and the coronavirus-hit China economy. rice field.

“What is clear is that forecasting this market is not perfect,” Angeline Neumann of UBS Global Wealth Management told Bloomberg Television.

“We live in a world where conflicting economic signals make it very difficult to determine the course of monetary policy.” Shanghai said after a report on Chinese factory activity showed another contraction. , fell as the sector was hit by Beijing’s zero-Covid strategy and high-temperature lockdowns that led to energy rationing.

The figures reinforced views that the world’s second-largest economy continues to struggle.

Tokyo, Sydney, Singapore, Wellington, Manila and Bangkok also fell, but Seoul, Jakarta and Taipei recovered from early declines. Hong Kong was flat.

London, Paris and Frankfurt all fell after overthrowing strong starts.

“With a very promising start to August, Powell’s speech last week stunned all sorts of hopes that we might see another positive month for the stock market,” said CMC Markets analyst Michael Hewson. I think it was the last straw,” he said.

Concerns about a slowing economy and possible hit to demand also dragged oil, with both major contracts down more than 5% on Tuesday, heading for its third monthly drop.

But market watchers see plenty of upside potential in commodities as investors grapple with a range of supply issues, including unrest in Libya and Iraq and expectations that Iran’s nuclear talks won’t end anytime soon. pointed out.

Adding to the upward pressure was news that Russian energy giant Gazprom had suspended delivery of gas via its Nord Stream pipeline through Germany for three days starting today. — AFP Asian markets broadly lower as traders focus on further monetary tightening

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