Asian stocks follow Wall St lower as rate hike worries grow

BEIJING

Wall Street was lower on Friday, with fears that U.S. rate hikes to combat inflation could stall economic growth.

Shanghai, Hong Kong Seoul, Sydney and Seoul all declined. Tokyo gained when trading resumed after a vacation.

Wall Street’s benchmark S&P 500 index plunged 3.6% on Thursday for its biggest one-day loss in two years as optimism that drove the previous day’s rally evaporated.

Investors wonder if the Federal Reserve, who raised its key rate by half of a percentage point on Wednesday night, can cool inflation without causing a recession. The Fed’s Chairman Jerome Powell made a brief encouragement to traders by not considering larger increases.

Rob Carnell, ING, said that investors were having second thoughts about the Fed’s so-called dovish increase’. saidIn a report. There is little chance of inflation rising soon, with rate hikes expected to continue rapidly.

The Shanghai Composite Index dropped 1.8% to 3,011.92, while Hong Kong’s Hang Seng fell 3.6% to 20,034.51. Tokyo’s Nikkei225 grew 0.6% to 26,973.98

The Kospi in Seoul tumbled 1.2% to 2,646.14 and Sydney’s S&P-ASX 200 lurched down 2.2% to 7,200.30.

India’s Sensex closed down 2% at 54.615.88. New Zealand, Singapore and other countries also fell.

Investor unease is increasing due to Russia’s aggression on Ukraine, high oil prices, and disruptions in global supply chains.

Thursday’s increase in the benchmark rate by the Bank of England was the fourth since December. This is to reduce British inflation, which has been at its highest point for 30 years.

The S&P 500 fell 3.6% to 4,146.87, giving back Wednesday’s 3% increase.

The Dow Jones Industrial Average fell 3.1% to 32.997.97. The Nasdaq, which is dominated by tech stocks fell 5% to 12,317.69

On Thursday, the U.S. government was expected to release employment numbers. This is a highly watched data point.

BNP Paribas economists still expect that the Fed will continue to raise the federal funds rate to 3% to 3.255%. This is up from zero to 0.2% earlier in the year.

Despite major oil producers’ decision on Thursday to increase exports, oil prices have remained above $100/barrel. European governments are looking at an embargo against Russian oil and trying to find other supplies in tight markets.

In electronic trading on New York Mercantile Exchange, Benchmark U.S. crude oil gained 44 cents and reached $108.70. On Thursday, the contract increased 45 cents to $108.26. Brent crude oil, which is the price basis for international oil trade, rose 46 cents to $111.36 a barrel in London. It rose to $110.90 per barrel from $111.36 in the previous session.

From Thursday’s 130.40yen, the dollar rose to 130.67yen. From $1.0519, the euro rose to $1.0526.