Asian stock markets fall amid inflation and oil price concerns


People wearing face masks walk past the electronic board of a bank displaying the Hong Kong stock index in Hong Kong on Tuesday, November 23, 2021. Asian stocks were mixed on Tuesday after a late decline left major indices of Wall Street mainly down. (AP Photo / Kin Cheung)


Asian stocks fell on Wednesday as concerns about inflation raised expectations that the US Federal Reserve could raise interest rates.

Japan’s Nikkei 225 fell 1.1% to 29,436.73 early in trading, after a public holiday on Tuesday. South Korea’s Kospi slipped 0.3% to 2,988.40. The Australian S & P / ASX 200 lost nearly 0.1% to 7,403.30. The Hong Kong Hang Seng lost 0.3% to 24,588.48, while the Shanghai Composite lost 0.4% to 3,575.93.

“Markets continue to shift their expectations for a tightening of the Fed’s monetary policy,” said Yeap Jun Rong, market strategist at IG, adding that investors would watch the release of US data later today. .

Some Asian central banks have already started raising interest rates to contain inflation. New Zealand on Wednesday raised its key rate from 0.25% to 0.75%.

In October, the Reserve Bank raised it from a record high of 0.25% to 0.5%, the first such hike in more than seven years, removing some backers it had put in place when the coronavirus pandemic has started.

The Fed will issue a report later today from its October policy meeting, potentially giving investors more details on the central bank’s plan to start cutting bond purchases that have helped keep rates down. ‘low interest.

Investors watched to see if the pressure from rising inflation would prompt the Fed to step up its plans to cut bond purchases and increase its benchmark interest rate.

Wall Street closed a wobbly trading day, as gains by banks and energy companies dampened losses elsewhere in the market. The S&P 500 managed to rise 0.2% to 4,690.70 after fluctuating between small gains and losses for much of the day.

The Dow Jones Industrial Average rose 0.5% to 35,813.80, while the Nasdaq composite closed down 0.5% to 15,775.14. Small business stocks also lost ground. The Russell 2000 Index fell 0.1% to 2,327.86.

Over 60% of S&P 500 stocks rose. Gains in banks, energy stocks and housewares companies were tempered by losses in technology and communications stocks, as well as a range of businesses that rely on consumer spending.

Retailers were mixed before the official start of the holiday shopping season. Discount retailer Dollar Tree jumped 9.2% for the S&P 500’s biggest gain. Starbucks was up 1.9%. Best Buy fell 12.3%, the biggest drop in the S&P 500, as concerns about squeezing margins outweighed strong earnings.

Technology and communications companies have also weighed on the broader market. Adobe fell 1.3% and Intel fell 1.5%.

Zoom Video fell 14.7% a day after the video conferencing company reported that third-quarter revenue growth had slowed.

The 10-year US Treasury yield rose 1.68% from 1.63% Monday night, but fell to 1.65% Wednesday at noon in Asia.

The price of U.S. crude oil rose 2.3% and wholesale gasoline by 3.4% on Tuesday after President Joe Biden ordered 50 million barrels of oil from the country’s strategic reserve to help reduce energy costs. This decision was made in concert with other major oil-consuming nations, including Japan.

While aggregate data from Japan did not show a problem with inflation across other countries, critics say it is just not so glaring, in sectors affected by the surge in prices of energy, from businesses that depend on fuel to plastic bags that are a petroleum product.

Releasing oil reserves won’t necessarily lower oil prices, but analysts say it could serve as a message to OPEC.

In energy trading, benchmark US crude rose 5 cents to $ 78.55 a barrel. Brent crude, the international standard, fell 21 cents to $ 81.12 a barrel.

Stocks are expected to experience more mixed trading this week, with US markets closing Thursday for Thanksgiving, then closing early Friday.

Wall Street will receive some economic data on Wednesday that could give investors a better idea of ​​the pace and extent of the economic recovery. The Ministry of Labor will publish its weekly report on unemployment benefits. The Commerce Department releases data on the third quarter gross domestic product and its new home sales report for October.

In currency trading, the US dollar fell to 115.09 Japanese yen from 115.15 yen. The euro cost $ 1.1236, compared to $ 1.1249.

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Felix J. Dixon