Global shares mostly fall as rate hikes, China slowdown loom

TOKYO

Global shares dropped Monday due to investor sentiment being weighed down by interest rate hikes, a slowing Chinese economy and lower global rates.

European shares declined in the early trading hours, while Asian benchmarks also declined.

China reported that its exports rose 3.7% in April to $273.6 million, compared to March’s 15.7%. As global demand declined, this is quite a contrast to March’s 15.7% growth. The world’s second largest economy, after Shanghai, was also under pressure as other industrial cities were closed down to battle virus outbreaks.

According to the sub-1% growth of April, imports grew 0.7% to $222.5 trillion.

Investors and companies worry that the “zero COVID” strategy of the ruling Communist Party, which temporarily shut down most businesses in Shanghai and other industrial centres, is disrupting global trade.

A slowing global economy is taking its toll.

“Chinese COVID-19 has been partly responsible for the disruptions that have affected the logistics industry and manpower. Julian Evans-Pritchard said that these disruptions are not to be underestimated. saidCommentary. “Instead, the decline in exports seems mainly to reflect softer demand.”

France’s CAC40 fell 1.4% in the early trading period to 6,172.41. Germany’s DAX dropped 1.1% to 13,520.87. The FTSE 100 in Britain was 1.1% lower at 7,306.34. U.S. shares fell with Dow futures falling 1.3% to 32.388.0. S&P 500 futures fell 1.5% to 4,058.75.

The Shanghai Composite saw little change, with an increase of 0.1% to 3,004.14. Hong Kong’s markets were closed on Monday due to a national holiday.

Japan’s benchmark Nikkei225 fell 2.5% to 26,319.34. South Korea’s Kospi dropped 1.3% to 2,610.81. Australia’s S&P/ASX 200 dropped 1.2% to 7,120.70. The benchmark in Jakarta (Indonesia) lost 4.4% last week as markets reopened following the Eid al-Fitr holiday.

Investors were closely watching the results of the Philippines’ presidential election. However, it remains to be seen how economic policies will change. According to most voter-preference survey results, Ferdinand Marcos, the son of a long-deposed Philippine dictator is the leading contender in Monday’s vote.

Wall Street’s turbulent week ended Friday with more losses, and the stock markets’ fifth consecutive weekly decline. The investors weighed the strong U.S. employment report against concerns that the Federal Reserve might cause a recession to curb inflation.

The S&P 500 ended with a loss of 0.6%. The Dow Jones Industrial Average declined 0.3%, while Nasdaq lost 1.4%. The Russel 2000 fell 1.7% to 1,839.56.

The war in Ukraine remains a source of uncertainty, despite concerns over inflation and restrictions to coronavirus. Ukrainian officials reported that over 60 people were killed in the attack on a school being used for shelter. said. Moscow’s forces launched an assault on the defenders of Mariupol’s steel plant, in an apparent race against time to capture the city before Russia’s Victory Day holiday Monday.

“Russia’s Victory Day today will also bring back geopolitical risk into the spotlight.” Although President Putin may reaffirm his justification for war in Ukraine, the markets will be monitoring any further attempts to intensify military operations to ensure the war. saidYeap Jun Roong, market strategist at IG Singapore.

Although the Fed hopes to raise rates and slow down the economy enough to stop the inflation that has been the highest in 40 years, it could impede growth if it does so too fast or too often.

Energy trading saw benchmark U.S. crude oil fall $1.29 to $108.48 a bar in electronic trading on New York Mercantile Exchange. Brent crude oil, which is the base for pricing oil in international trading, declined $1.15 to $111.24 per barrel.

The U.S. dollar rose from 130.55 to 131.13 yen in currency trading. The euro costs $1.0517, a decrease of $1.0545.

——

Joe McDonald, AP Business Writer in Beijing, contributed