Asian benchmarks are generally down after a tepid session on Wall St
Asian stocks were mostly down on Wednesday after tepid trading on Wall Street amid concerns about a global recession.
Major benchmarks fell across Asia. Oil prices have regained some lost ground. Analysts said markets were focused on a variety of risks, including inflation, oil prices, decisions by the US Federal Reserve and other central banks on interest rates, political developments in Great Britain and concerns about COVID-19.
But the basic mood seemed to be wait-and-see.
Wall Street saw a weak open after markets closed Monday for the Independence Day holiday. The price of U.S. crude oil fell $8.93, eventually settling below $100 a barrel for the first time since early May.
On Wednesday, benchmark U.S. crude rose 42 cents to $99.92 a barrel. Brent crude, the international standard, gained 97 cents to $103.74 a barrel.
Market volatility reflects growing concerns among investors about economies slowing under the weight of soaring inflation and sharply rising interest rates, pressures that could tip them into recession.
“Although China has seen another wave of COVID, nothing new or market-related seemed to warrant the severity of the decision,” Stephen Innes, managing partner at SPI Asset Management, said of oil prices.
Japan’s benchmark Nikkei 225 lost 1.1% in afternoon trade to 26,134.71. Australia’s S&P/ASX 200 slipped 0.5% to 6,594.50. The South Korean Kospi fell 1.9% to 2,297.02. Hong Kong’s Hang Seng fell 2.4% to 21,333.26 while the Shanghai Composite slipped 1.9% to 3,337.88.
Japan has legislative elections this weekend, but the expected outcome is for more stability. Prime Minister Fumio Kishida appears to be heading for victory amid a sharply divided and discredited opposition, polls show, despite the ruling party’s stumbles over the fight against coronavirus infections, the economy and various scandals.
Stock indices ended with meager gains on Wall Street with a late afternoon rally led by tech companies.
The S&P 500 rose 0.2% to 3,831.39. The Nasdaq climbed 1.7% to 3,831.39. The Dow Jones Industrial Average remained in the red, losing 0.4% to 30,967.82. Small company stocks rebounded from a pessimistic start. The Russell 2000 gained 0.8% to 1,741.33.
In Britain, the FTSE 100 fell 2.9% after two of British Prime Minister Boris Johnson’s top ministers resigned, saying they had lost faith in Johnson’s leadership amid shifting explanations over his handling of a sexual misconduct scandal.
Energy, Industrials, Healthcare and most of the 11 S&P 500 sectors ended in the red, despite a late rally in tech stocks, communications companies and retailers and other businesses that rely on data. direct consumer spending.
Stocks failed to rebound from a slump that sent the S&P 500 into a bear market last month, meaning a prolonged decline of 20% or more from a recent high. Market performance in the first half of 2022 was the worst since the first six months of 1970.
Inflation squeezed businesses and consumers, tightening its grip after Russia invaded Ukraine in February. The invasion drove up oil prices globally and drove gasoline prices in the United States to record highs. Consumers grappling with higher prices on everything from food to clothes are cutting spending.
Lockdowns in China due to rising COVID-19 cases have also compounded supply chain issues.
Wall Street has been watching the latest economic updates closely for more clues about inflation’s impact on the economy and whether that could alter the Fed’s stance on rate hikes. Wall Street will take a closer look at the job market on Friday when the government releases employment data for June.
Investors are also eagerly awaiting the next round of corporate earnings. Several big companies have recently warned that their bottom line is being squeezed by inflation, including spice and seasoning maker McCormick.
In currency trading, the US dollar fell slightly to 135.12 Japanese yen from 135.84 yen. The euro traded at $1.0260, down from $1.0266.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama