FILE PHOTO – An investor sits in front of a board showing information about shares in a brokerage office in Beijing, China, December 7, 2018. REUTERS / Thomas Peter
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BEIJING / HONG KONG, May 19 (Reuters) – Asian stocks fell on Thursday, following a sharp sell-off on Wall Street as investors worried about global inflation, China’s zero COVID-19 policy and the war in Ukraine as the dollar fell.
European stock markets also seemed prepared for another difficult day. Euro Stoxx 50 futures in the region fell 0.52%, German DAX futures were down 0.63% and FTSE futures were 0.51% lower.
Nasdaq futures fell 0.15%, although S & P500 futures reversed earlier losses to 0.05% higher.
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On Wall Street night, retail giant Target Corp (TGT.N) warned of a bigger margin hit due to rising costs, as it reported that its quarterly profit had halved. His shares fell 24.88%. The Nasdaq fell nearly 5 percent, while the S&P 500 lost 4 percent.
“Tuesday’s rebound has been shown to be ‘overly optimistic’, so self-doubt resulting from misjudgment makes it even harder for retailers to click the sell button,” said Hebe Chen, a market analyst at IG.
MSCI’s broadest Asia-Pacific stock index outside Japan (.MIAPJ0000PUS) rose in four days and fell 1.8%, driven by a 1.5% loss to Australia’s resource-rich index (.AXJO). a 2.1% drop in shares in Hong Kong (.HSI) and a 0.3% decline in mainland China’s (.CSI300).
Japan’s Nikkei (.N225) fell 1.7%.
The technology giants registered in Hong Kong (.HSTECH) were particularly hard hit, with the index falling by more than 3%. Tencent (0700.HK) sank more than 6% after declining no revenue growth in the first quarter, its worst performance since going public in 2004 read more
China’s technology sector is still rocked by years of government repression and slowing economic prospects stemming from Beijing’s tough zero-COVID policy, although reassuring comments by Deputy Prime Minister Liu He to technology leaders boosted sentiment on Wednesday. Read more
Two U.S. central bankers say they expect the Federal Reserve to move to a more moderate pace of policy tightening after July as it seeks to curb inflation without raising borrowing costs so high as to plunge the economy into recession. Read more
“It must be said that the concern about inflation has never disappeared since we set foot in 2022. However, although things have not reached a point of no return, they seem to be moving in the direction of ‘out of control’. probably the most worrying part about the market, “said Chen of IG.
The US dollar, which rose due to declining risk appetite, fell 0.15% against a basket of major currencies after a 0.55% jump at night, ending a three-day series of losses.
Aussie rose 0.8 percent, while New Zealand’s kiwi jumped 0.6 percent as easing the COVID blockade in Shanghai helped lift sentiment.
Wednesday’s data shows that British inflation has risen to its highest annual rate since 1982, as energy bills jumped, while Canadian inflation rose to 6.8% last month, largely driven by rising food and shelter are valued.
Bilal Hafiz, chief executive of London-based research firm MacroHive, said he was currently heavily addicted to asylum assets, especially cash.
“There may be short-term rebounds in stocks like the last few days, but the big picture is that the era of low incomes is over and we are moving into an environment with higher interest rates,” Hafiz told Reuters Global Markets Forum.
“This will put pressure on all markets that have benefited from low incomes – especially stocks.”
US bonds rose overnight and were largely stable in Asia, leaving yields on benchmark 10-year government securities at 2.9076%.
The two-year yield, which rose with traders’ expectations of higher interest rates on Fed funds, reached 2.6800% compared to a closing in the US of 2.667%.
Oil prices recovered from early losses as continuing fears of limited global supplies outweighed fears of slower economic growth.
Brent crude rose 1.2 percent to $ 110.41 a barrel, while US crude rose 0.8 percent to $ 110.48 a barrel.
Gold was a little lower. Spot gold is trading at $ 1814.88 an ounce.
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Additional reports from Divya Chowdhury; Edited by Sam Holmes, Kenneth Maxwell and Kim Coghill
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