Asian stocks extend global slide as inflation fears bite

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TOKYO (Businesshala) – Asian equities followed Wall Street sharply and bonds edged higher on Friday as risk sentiment soured amid rising concerns that inflation could remain high even after the peak of global growth.

FILE PHOTO: A man wearing a protective mask, amid the COVID-19 outbreak, is seen on an electronic board displaying stock prices outside a brokerage in Tokyo, Japan, September 21, 2021. Businesshala / Kim Kyung-hoon

Japan’s Nikkei fell 1.86%, while the broader Topics fell 1.95%.

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Australian shares fell 2.05% and South Korea’s Kospi fell 1.51%.

The MSCI index of Asia-Pacific shares fell 1.07%.

Chinese markets are closed for a week from Friday on account of the Golden Week holiday.

“You could argue whether this is a truly stagflation or not, but the whole growth-inflation background seems to be skewed less favorable,” said Rob Carnell, head of Asia-Pacific research at ING in Singapore.

“Whether or not this is actually going to be contained and will cause problems for years to come, we don’t need to know right now – it’s scary enough that what we’re seeing in the markets is justified.”

After the index lost 1.19% overnight, US stock futures pointed to a 0.51% drop for the S&P 500.

Nasdaq futures also indicated a 0.49% retreat, adding to Thursday’s loss of 0.43%.

The benchmark 10-year Treasury note continued to rally in Tokyo trading, with the yield slipping to the lowest since September 28 at 1.48%.

The dollar index, which measures the currency against six major rivals, was off Thursday’s one-year high of 94.504, last changing hands at 94.326.

Federal Reserve Chairman Jerome Powell said Wednesday that resolving the “tension” between high inflation and high unemployment is the Fed’s most urgent issue, acknowledging a potential conflict between the US central bank’s two goals of stable prices and full employment. Is.

China has proved to be a particular concern for investors, hit by regulatory restrictions in the tech and property sectors, and is now grappling with power shortages that threaten to drive up energy prices globally.

Crude oil prices continued to fall on Friday after Brent topped $80 a barrel for the first time in three years.

Brent crude futures were largely flat at $78.32 as of Thursday, while US crude futures were also little changed at $75.07.

Gold, an inflation hedge and safe haven, fell 0.1% to $1,755.35 an ounce, the biggest since March, after rising Thursday’s 1.77%.

Reporting by Kevin Buckland; Editing by Lincoln Feast.

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