Global stocks sink on worries over inflation, supply chains

BEIJING

Wall Street futures and global stock markets fell Monday after the Federal Reserve suggested it might raise interest rates aggressively to cool U.S. inflation. President Emmanuel Macron was elected from the first round of France’s elections facing a challenger from the far right.

London and Frankfurt opened lower. Shanghai, Tokyo, and Hong Kong all retreated. Oil prices fell by more than US$2 per barrel because of concerns that global economic growth might slow down.

Investors are concerned about higher interest rates, Russia’s war on Ukraine, and China’s efforts to contain coronavirus epidemics.

In notes from the meeting last month, Fed officials indicated that they are considering raising the U.S. benchmark interest rate by twice the normal amount at future meetings. They indicated that they may reduce the Fed’s bond portfolio, which could increase commercial borrowing rates.

Investors see “increasing evidence the Federal Reserve will take a more committed approach”In a report, Stephen Innes, of SPI Asset Management, stated that inflation must be controlled.

Early trading saw the FTSE 100 in London fall 0.3% to 7,644.69, and Frankfurt’s DAX drop 0.3% to 14,241.45.

After Macron declared that he will be fighting Marine Le Pen, the National Rally’s challenger for the April 24 second round voting, the CAC 40 in Paris rose 0.7%. They were both finalists in the presidential election five-years ago.

“Markets are looking to a volatile two weeks before the final result is known,”Charlotte de Montpellier, Antoine Bouvet, of ING, said in a report.

On Wall Street, the future for the benchmark S&P 500 index was off 0.4% and that for the Dow Jones Industrial Average was down 0.2%.

On Friday, the S&P 500 lost 0.3% and the Dow rose 0.4%. The Nasdaq Composite fell 1.3%

Higher interest rates are a common way to depress economic activity. They make safer assets like bonds more attractive and make stocks seem riskier and more costly.

Some worry the Fed, after being accused of reacting too late to rising inflation, might push the brakes too hard and tip the world’s biggest economy into recession. Deutsche Bank economists last week predicted that the United States would be in recession by the end of next year.

After inflation rose to 1.5% from 0.9% in March, the Shanghai Composite Index dropped 2.6% to 3,167.13. This was due to rising global prices and uncertainty surrounding Russia’s war with Ukraine.

Inflation “may limit the space to cut interest rates”Nomura analysts have released a report stating that China needs to boost its economic growth.

China’s automakers, along with other manufacturers, are cutting production to avoid supply disruptions.

Automaker BYD lost 4.5%, while Dongfeng Motor Group Co. lost 3.6%. Reports of further regulatory crackdowns in technology also led to the collapse of technology firms.

The Nikkei225 in Tokyo fell 0.6% to 26,821.52 while the Hang Seng in Hong Kong fell 3% to 21,208.30.

The S&P-ASX 200 in Sydney advanced 0.1% to 7,485.20.

India’s Sensex dropped 0.5% to 59.183.25. New Zealand and Singapore saw their shares decline, while Indonesia rose.

Oil prices fell back on fears of lower demand after peaking at $130 per barrel last month. This was due to concerns about Russia’s disruption of supplies. 2 exporter.

ACM Research, an equipment supplier for the semiconductor industry, saw its stock fall 6.1% on Friday, after the company stated that the restrictions would have a significant impact upon its revenue.

Energy markets saw benchmark crude oil fall $2.32 to $95.94 a barrel in electronic trading on New York Mercantile Exchange. The contract rose by $2.23 to $98.26, on Friday. Brent crude oil, which is used as a price basis for international oils, fell $2.22 to $100.56 a barrel in London. It rose $2.20 from the previous session to $102.78/barrel.

The dollar rose to 125.33 Japanese yen, compared to Friday’s 124.37. The euro was at $1.0906 and was unchanged