TOKYO (AP) – Asian stocks fell mostly on Thursday, repeating a retreat on Wall Street when investors worried about rising interest rates and rising coronavirus cases in some regions.
Performance declined in Tokyo, Hong Kong, Seoul and Sydney, but rose in Shanghai.
Oil prices fell more than $ 2 a barrel ahead of an OPEC meeting scheduled for later that day. The oil-producing countries are expected to decide on production targets at their first meeting since Europe imposed sanctions on Russian oil.
In China, strict restrictions on COVID-19 are returning to Hong Kong as the number of infections increases, and in Shanghai they are gradually being removed. China adheres to a “zero COVID-19” strategy that requires blocking, mass testing, and isolation for those who become infected or have been in contact with someone with a positive test.
“Weakening sentiment on Wall Street may not provide a particularly positive background for today’s session in Asia, when Chinese stocks quoted in the US will fall in price along with Western counterparts,” said Yep Joon Rong, IG’s market strategist in Singapore.
Japanese benchmark Nikkei 225 lost 0.2% to 27,413.88. The Australian S & P / ASX 200 fell 0.8% to 7,175.90. South Korean Kospi fell 1.1% to 2,657.50. Hong Kong’s Hang Seng fell 1.2% to 21,040.62, while the Shanghai Composite reversed previous losses, rising 0.3% to 3,193.06.
Shares on Wall Street began to decline immediately after the release of several reports on the U.S. economy, including one showing that output growth was stronger last month than expected. This has boosted investors ’expectations that the Federal Reserve will continue to aggressively raise interest rates to slow the economy in hopes of curbing inflation.
The S&P 500 fell 0.7% to 4,101.23. The Dow Jones industrial average fell 0.5% to 32,813.23.
The Nasdaq index fell 0.7% to 11,994.46. Shares of smaller companies also lost ground. The Russell 2000 index fell 0.5% to 1,854.82.
Daily market fluctuations have become commonplace on Wall Street amid fears that too aggressive a Fed rate hike could force the economy into recession. Even if it can avoid suffocating the economy, higher rates are putting downward pressure on stocks and other investments. High inflation meanwhile is eating away at corporate profits, while the war in Ukraine and the slowdown in business, restrictions against COVID-19 in China have also affected markets.
The Fed has signaled that it may continue to raise its key short-term interest rate twice as much as usual at upcoming meetings in June and July. Last week, there was speculation that the Fed might consider suspending at its September meeting, which helped the stock rise. But such hopes were dashed after a report on production Wednesday by the Institute of Supply Management.
He pointed out that U.S. production growth accelerated last month, contrary to economists ’expectations regarding the slowdown. A separate report says the number of vacancies across the economy in April was slightly lower, but remains much higher, at 11.4 million than the number of unemployed.
The Fed began a program Wednesday to cut some of the trillions of dollars in treasury and other bonds it has amassed as a result of the pandemic. Such a move should put upward pressure on long-term rates.
The yield of the 10-year treasury rose to 2.92% from 2.84% just before the report was published.
At the beginning of Thursday, the reference American oil lost $ 2.28 to $ 112.98 per barrel. Oil prices rose 0.5% to $ 115.26 on Wednesday. Brent crude, an international standard, fell from $ 2.19 to $ 114.10 a barrel.
In foreign exchange trading, the US dollar fell to 129.85 Japanese yen from 130.15 yen. The euro rose to $ 1.0672 from $ 1.0649.