Anshuman Daaga

SINGAPORE (Reuters – Asian shares plunged on Tuesday, as risk-averse investors sold off their more volatile assets in fear of higher interest rates and the impact they would have on growth. However, the dollar remained near its 20-year peak.

MSCI’s Asia-Pacific share index was 0.8% lower than usual, for seven consecutive sessions. The declines have continued to 17% in this year.

Asia was awash in red share indexes. Australian shares lost 2.5%, and Korean stocks fell 2%.

Both stock futures and futures for Nasdaq fell 0.5% while futures for Nasdaq were 0.6% lower.

Analysts from ANZ stated in a report that “the idea of a benign, gentle tightening cycle” has been abandoned.

“The fact is that Fed cannot control supply in the short term, so long key indicators such the labour force participation and slow Chinese exports stay low, there’s no risk to inflation.

The interest rates at the United States’, Britain’s and Australia’s central banks were raised last week by investors. This was in response to rising inflation.

As investors scrambled to avoid a weakening economy, U.S. stock prices extended their Friday sell-off. [.N]

Prices of oil dropped on Tuesday due to concerns about demand as China continues its coronavirus lockdowns. China is the world’s largest oil importer. The price of an oil barrel fell to $105.4 after falling 5.7% on Monday.