Global Stocks Fall After U.S. Selloff; Futures Edge Down

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Tencent leads pullback in Chinese tech stocks in Hong Kong

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On Wednesday, the S&P and the Dow Jones industrials both suffered their worst percentage declines since 2020. Some major US retailers like Target and Walmart have this week reported lower quarterly earnings due to rising costs, sluggish sales and supply-chain disruptions, fanning concerns that the global economy could be headed for a recession.

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“Throw in monetary policy tightening into the mix, we’ve got a recipe for volatility and investor jitteriness,” said Clara Cheong, a global market strategist at JP Morgan Asset Management.

Federal Reserve Chairman Jerome Powell on Tuesday said the central bank’s resolve in combating the highest inflation in 40 years shouldn’t be questioned, even if it requires pushing up unemployment.

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In Hong Kong, stocks of Chinese internet companies dragged down wider benchmarks, with the Hang Seng Index dropping 2.7% and the Hang Seng Tech Index retreating 4.2%. Shares of social-media and videogames behemoth Tencent fell 7.1% after the company reported its worst quarterly profit drop since listing in the city.

While Tencent executives said they saw “clear, supportive” signals from the government, they also warned that there would be a time lag before its business began to benefit from more stable regulation and support measures.

“Investors will need to see a more concrete action plan from Chinese authorities in order to be able to price in what a normalized profit outlook can look like for the sector,” said Ms. Cheong at JP Morgan Asset Management.

Elsewhere in Asia, the CSI 300 index of the largest stocks listed in Shanghai and Shenzhen fell 0.4%. Japan’s Nikkei 225 dropped 1.9% and South Korea’s Kospi Composite declined 1.3%.

The yield on the benchmark 10-year Treasury note rose to 2.904% from 2.884% Wednesday. Yields and prices move inversely.

In energy markets, Brent crude rose 1.1% to $110.33 a barrel. In cryptocurrencies, bitcoin traded at about $29,023 by early afternoon Thursday in Hong Kong, according to CoinDesk. That was lower from 5 pm ET Wednesday, when it stood at about $29,205.

Write to Dave Sebastian at [email protected]


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