Asian stocks down after Wall St’s weekly loss on rate fears

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By JOE McDONALD, AP Business Writer

BEIJING (AP) — Asian stock markets fell on Monday after Wall Street ended with a loss for the week amid concern over the Federal Reserve’s plans for further interest rate hikes to calm the economy. ‘inflation.

Hong Kong’s benchmark fell more than 3%. Shanghai, Tokyo and Sydney also fell. Oil prices have fallen.

All major U.S. stock indices ended in a weekly loss after Fed official James Bullard jolted investors by suggesting the U.S. central bank’s base rate may need to be raised to almost the mark. double its already high level.

“Bullard has obscured the light on the rallies,” Mizuho Bank’s Tan Boon Heng said in a report.

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The Hang Seng in Hong Kong fell 3.02% to 17,448.64 after the territory’s chief, John Lee, tested positive for coronavirus after returning from an Asia-Pacific meeting in Bangkok.

The Shanghai Composite Index fell 0.7% to 3,074.26 and the Nikkei 225 in Tokyo was down 0.1% to 27,873.19.

South Korea’s Kospi fell 1.3% to 2,413.36 and Sydney’s S&P-ASX 200 lost 0.1% to 7,143.50.

New Zealand, Bangkok and Indonesia won while Singapore slipped.

On Friday, Wall Street‘s benchmark S&P 500 index rose 0.5% to 3,965.34. The Dow Jones Industrial Average added 0.6% to 33,745.69. The Nasdaq composite lost less than 0.1% to 11,146.06.

All major U.S. indexes ended with a loss for the week after Bullard, chairman of the St. Louis Federal Reserve Bank, made a presentation indicating that the Fed’s benchmark rate may need to rise between 5% and 7%. That would fall from its current level of 3.75% to 4% after four hikes of 0.75 percentage points, or three times the usual Fed margin.

Investors fear that repeated rate hikes by the Fed and central banks in Asia and Europe this year to curb soaring inflation could tip the global economy into recession.

Traders are hoping that economic activity is slowing and easing inflationary pressures might prompt the Fed to ease its plans. Fed officials, including Chairman Jerome Powell, have warned that rates may need to stay high for an extended period to extinguish inflation.

Traders expect the Fed to raise its key rate again at its December meeting, but with a narrower margin of 0.5 percentage points.

Major U.S. retailers advanced after posting strong quarterly results and giving investors encouraging financial forecasts. Discount retailer Ross Stores jumped 9.9% in the biggest gain among S&P 500 stocks. Footwear seller Foot Locker soared 8.7% after raising its profit and revenue forecast for the year.

U.S. retail sales rose 1.3% in October, a sign of consumer confidence ahead of Christmas shopping. Yet with inflation high, major retailers say Americans are waiting for sales and refusing to pay full price.

Healthcare and financials stocks also rose. UnitedHealth Group rose 2.9% and Charles Schwab added 2.5%.

Energy and communications companies declined. Marathon Oil fell 1.6% amid a broad decline in energy prices. US crude oil fell 1.9%. Live Nation, an entertainment promoter and venue operator, fell 7.8%.

In energy markets, benchmark U.S. crude fell 74 cents to $79.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.56 to $80.08 on Friday. Brent crude, the price basis for international oil trade, fell 90 cents to $86.72 a barrel in London. It fell from $2.16 to $87.62 the previous session.

The dollar rose to 140.42 yen from 140.36 yen on Friday. The euro fell to $1.0295 from $1.0331.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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