Asian stock markets were mostly down on Friday after Wall Street fell on fears that interest rate hikes could depress global economic activity.
Tokyo, Seoul and Sydney fell. Shanghai and Hong Kong grew. Oil prices fell slightly but remained above $115 a barrel.
Wall Street’s benchmark S&P 500 index tumbled 3.3% after Britain’s central bank followed the Federal Reserve’s lead in raising its key interest rate to cool soaring prices. The central banks of Switzerland and Taiwan also raised their rates.
Investors fear that measures to control inflation, which is at four-decade highs, could tip the United States and other major economies into recession.
“Pain is inflicted almost everywhere, and sharing does nothing to improve it,” Mizuho Bank’s Tan Boon Heng said in a report.
Markets were not reassured by President Joe Biden’s comments to The Associated Press on Thursday that he saw reason to be optimistic about the economy.
A recession is “not inevitable,” Biden said.
The Shanghai Composite Index rose less than 0.1% to 3,287.88 while the Nikkei 225 in Tokyo fell 2.3% to 25,822.56. The Hang Seng in Hong Kong gained 0.6% to 20,983.41.
Seoul’s Kospi fell 1.2% to 2,420.34 and Sydney’s S&P-ASX 200 fell 2.1% to 6,450.30.
New Zealand, Bangkok and Jakarta fell while Singapore gained.
On Wall Street, the S&P 500 fell to 3,666.77 for its sixth decline in the past seven trading sessions. All stocks in the index, except 3%, fell.
The benchmark gave up its 1.5% gain the previous day after the Fed announced a rate hike of 0.75 percentage points, three times its usual margin. Chairman Jerome Powell said Wednesday that the Fed is “not trying to cause a recession now.”
The S&P 500 is 23.6% below its January 3 high. That wipes out gains from 2021, one of Wall Street’s best years this century.
The Dow Jones Industrial Average fell 2.4% to 3,666.77. The Nasdaq fell 4.1% to 10,646.10.
Japan’s central bank concluded a two-day meeting on Friday without major changes to its ultra-low interest rate policy, imposed years ago in an attempt to combat deflation or falling prices. So far, he has avoided raising rates.
Along with raising interest rates, the Fed is allowing some of the trillions of dollars of bonds it bought during the pandemic to come off its balance sheet. This should put upward pressure on long-term interest rates.
Fewer American workers applied for unemployment benefits last week than a week earlier, according to a report on Thursday. But other signs of trouble have emerged.
In energy markets, the benchmark US oil lost 57 cents to $117.02 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.27 on Thursday to $117.58. Brent crude, the price basis for international trade, fell 47 cents to $119.34 a barrel in London. It gained $1.30 the previous session at $119.81.
The dollar gained 133.40 yen from 132.00 yen on Thursday. The euro fell to $1.0536 from $1.0573.