Asian Stocks Crash During War, Inflation Dominates Markets – WSB-TV Channel 2

BANGKOK — (AP) — Stocks fell on Friday in Asia as uncertainty surrounding the war in Ukraine and still-high inflation maintained their grip on markets.

Hong Kong fell 3.2% and Tokyo 2.6%.

Investors are worried about how the global economy might fight off price pressures and slowing growth.

A plan to revoke Russia’s most favored nation trade status following its invasion of Ukraine has added to unease over the economic repercussions of the escalating conflict after talks between foreign ministers of the two countries showed no concrete progress.

President Joe Biden plans to announce the change on Friday, according to a source familiar with the matter who spoke on condition of anonymity to preview the announcement.

Pressure is mounting in Washington to revoke what is officially known as “permanent normal trade relations” with Russia, allowing the United States and its allies to impose tariffs on Russian imports.

Tokyo’s Nikkei 225 index lost 660 points to 25,032.61 and the Hang Seng in Hong Kong fell 667 points to 20,222.79.

The Shanghai Composite Index fell 2.2% to 3,224.92 after Chinese Premier Li Keqiang, the country’s No. 2, said the government hoped to create up to 13 million new jobs this year while trying to reverse a painful economic downturn.

Premier Li Keqiang has pledged “pro-employment policies” including tax and fee cuts totaling 2.5 trillion yuan ($400 billion) for businesses. Economic growth fell to 4% from a year earlier in the last quarter of 2021, down from the full-year expansion of 8.1%.

Soaring coronavirus cases in mainland China and Hong Kong have added to concerns weighing on their markets.

The Kospi in Seoul fell 1.1% to 2,651.22. In Australia, the S&P/ASX 200 fell 0.7% to 7,079.10. India gained 0.2% but other regional markets declined.

Investors are staying on the sidelines ahead of the weekend, given the potential for big surprises as markets close, analysts said.

“When confidence is low, risk managers are in charge, keeping bank and market maker liquidity to a minimum, which could exacerbate interday movements,” API Asset Management’s Stephen Innes said in a commentary.

“And it’s no wonder, because predicting daily market actions is about as consistent as flipping a coin,” Innes said.

Stocks slid on Wall Street on Thursday in choppy trading as oil prices rebounded, with a barrel of U.S. crude jumping 5.7%, before ending down 2.5%. A day earlier, benchmarks hit their biggest gain since June 2020, when a slump in oil prices appeared to ease pressure on high global inflation.

The S&P 500 fell 0.4% to 4,259.52. The benchmark is now 11.2% below the all-time high it hit earlier this year. The Dow Jones Industrial Average fell 0.3% to 33,174.07, while the tech-heavy Nasdaq composite slipped 0.9% to 13,129.96.

Small company stocks held up better than the broader market. The Russell 2000 was down 0.2%, at 2,011.67.

Oil swings are just some of the waves rocking the markets. The European Central Bank said high inflation will push it to conclude its bond-buying program intended to stimulate its economy faster than expected. In the US, a report showed consumer prices jumped 7.9% in February from a year earlier. This is the largest spike since 1982, although the reading was largely in line with expectations.

Volatility has become the norm since Russia invaded Ukraine. This has raised concerns about rising prices for oil, wheat and other commodities produced in the region.

Investors were already nervous before the war as high inflation prompted central banks to raise interest rates for the first time since the start of the pandemic and to suspend programs launched to support the global economy.

Analysts said Thursday’s U.S. inflation report was what economists expected, and did not include the most recent surge in oil and gasoline prices after the invasion of Ukraine by Russia. It also did not reach the 8% threshold that could set off the alarm.

Many investors said the report was unlikely to change anything for the Federal Reserve, which is expected to raise its short-term policy rate by a quarter of a percentage point next week, the first hike since 2018. Higher rates are slowing the economy and the Fed tries to raise them enough to curb inflation, but not enough to cause a recession.

Oil prices have moderated since their wild swings earlier this week.

Benchmark U.S. crude added 26 cents to $106.28 a barrel after falling $2.68 to $106.02 a barrel on Thursday.

Brent crude, the basis for international prices, fell 19 cents to $109.14 a barrel.

So far, this oil and the benchmark US oil are up more than 40% for 2022, although they remain below highs reached earlier this week, when US oil briefly rose above $130.

The 10-year Treasury yield, which tracks expectations for inflation and economic growth, fell immediately after the release of the inflation report. It rose to 2% against 1.94% on Wednesday evening. Early Friday, it was at 1.97%.

The US dollar rose to 116.51 Japanese yen from 116.11 yen and the euro rose to $1.1002 from $1.0987.

About Wendy Hall

Check Also

As It Happened – WION Global Summit 2022: Mission for Peace Comes to an End

Word of welcome Sunjay Sudhir, Ambassador of India to the United Arab Emirates The speakersAbdulla …