Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Asian Stocks Down as Tightening Monetary Policy Worries Investors

Published 10/05/2022, 12:44 pm
© Reuters.
AXJO
-
JP225
-
HK50
-
KS11
-
SSEC
-
SZI
-

By Gina Lee

Investing.com – Asia Pacific stocks were down on Tuesday morning as investors are concerned that the interest rate hikes might impact economic growth.

Japan’s Nikkei 225 fell 1.14% by 10:10 PM ET (2:10 AM GMT), and South Korea’s KOSPI fell 1.40%.

In Australia, the S&P/ASX 200 was down 1.47%.

Hong Kong’s Hang Seng Index tumbled 2.52%.

China’s Shanghai Composite inched down 0.01% while the Shenzhen Component was down 1.07%. Shanghai is further tightening its lockdown measures as China reiterated its zero-Covid policy.

"The idea of a benign and gentle tightening cycle has evaporated," ANZ analysts told Reuters.

"The reality is that the U.S. Federal Reserve cannot control the supply side of the economy in the short-run, so as long as key indicators like the labor force participation rate stay low and Chinese exports slow, the risk to inflation, and therefore interest rates, lies to the upside," ANZ said.

Central banks raised their interest rate to fight against soaring inflation.

The U.S. central bank hiked its interest rate to 1%, the biggest interest rate increase since 2000. Across the Atlantic, the Bank of England increased its interest rate to 1% as it handed down its policy decision on Thursday, the highest since 2009.

Overnight, U.S. stocks extended Friday's sell-off as investors were concerned about a weakening economy.

On the data front, investors now await U.S. Core Consumer Price Index (CPI) on Wednesday, as well as the U.S. Producer Price Index and initial jobless claims, which are due on Thursday.

Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams, and Fed Governor Christopher Waller will speak later today.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.