Asian stocks track global shares lower, U.S. CPI in focus -Breaking
Stella Qiu & Alun John
BEIJING/HONG KONG – Asian shares fell on Wall Street, but the dollar maintained its overnight gains. Investors were unnerved by the European Central Bank’s rate rise guidance and upcoming U.S. inflation data.
MSCI’s Asia-Pacific share index outside Japan was down 1.2% during early Asian trade. This was due to drops in Hong Kong, 0.8% Australia (resource-heavy Australia), and 1.6% South Korea.
Hong Kong listed tech companies were badly hit by the sub-index closing 2.9% lower. Hong Kong shares Alibaba The stock index (NYSE:) dropped 3.3% following Ant Group’s statement that it did not plan to launch an initial public offering. This statement was made in response to media reports claiming that Beijing had authorized the IPO’s relaunch.
Overnight, Alibaba shares fell 8.1% in America.
As new COVID-19 case after cases in Beijing and Shanghai have been filed, market sentiment has declined in China. Numerous districts of Beijing have shut down entertainment venues. Most Shanghai citizens are now subject to new mass tests that aim to stop the spread of an epidemic.
The European Central Bank announced that it will end a lengthy-running stimulus program on Thursday and would announce next month’s first interest rate increase since 2011. It could also make a larger move in September.
Although the ECB’s decision was expected, sentiment was affected by the prospect of a bigger rise in September. A prolonged conflict in Ukraine has aggravated the slowing of growth and high inflation within the eurozone.
Analysts at ANZ wrote that global equities were under pressure following the release of ECB guidance. Christine Lagarde, (ECB President) noted upside inflation risk,” in a Friday note.
With energy prices pushing up, there is no way to know if inflation has peaked. Fed policy and guidance may need to be more hawkish longer. “The financial markets are very nervous.”
The market has been focusing on the pace central banks have taken to lower inflation for many months. Investors are now expecting the Federal Reserve (Federal Reserve) to increase interest rates by 50basis points next week. This is especially important if U.S. consumer-price data Friday shows an elevated level of inflation.
According to consensus, May’s year-over-year inflation rate will be 8.3%. This is unchanged from April.
Wall Street shares fell as Wall Street waited for price data. The Nasdaq and The fell by more than 2 percent in the largest daily percentage drops since May, when mega-cap stocks led the charge.
Apple Inc (NASDAQ) and Amazon.com Inc. (NASDAQ) both fell by 3.6% and 4.2% respectively.
Investors have been optimistic that inflation has peaked but a rise in oil prices, to 13-week highs, has lowered that optimism and boosted the attractiveness of the safe-haven dollars.
The U.S. Dollar held its strength in currency markets against major currencies and hovered around its highest point in three weeks. While the euro sank to a 2 1/2 week low, the yen rose 0.16% against its greenback, moving away from a low of 20 years.
U.S. Treasuries moved largely in the neutral zone on Friday. Comparable to its close in the U.S. of 3.042%, benchmark’s yield rose slightly to 3.0566%.
Two-year yields rise with investors’ expectation of higher Fed funds rates. It was 2.8319% compared to 2.817% at the close in America.
Prices of oil dropped after new restrictions were imposed in parts Shanghai. However, crude oil prices remained at three-month highs thanks to strong gains in refined goods.
Futures settled at $122.81 after falling 0.2% to $112.1.33 per barrel.
As Treasury yields increased, gold fell on Friday. The price of gold was $1,846.4949 an ounce. [GOL/]