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Asian stocks mostly fall as rates rise and China slowdown looms | Economic news

By YURI KAGEYAMA, AP Business Writer

TOKYO (AP) — Stocks fell in most Asian markets on Monday as interest rate hikes and a slowing Chinese economy weighed on investor sentiment.

Oil prices were higher and US futures fell after Wall Street’s sharp declines last week.

Landmarks have declined throughout the region. Jakarta’s benchmark fell 4%.

Market participants were waiting for Chinese trade data for April for an indication of the severity of restrictions aimed at curbing the spread of COVID-19 infections that have hurt the economy.

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“The global investment community is slowly waking up to the idea we’ve been touting for a long time: that there’s a post-COVID-recovery-euphoria ‘hangover’, coupled with the associated inflation and now a European war. and further inflationary momentum as well as the world’s largest port is closed,” said Clifford Bennett, chief economist at ACY Securities.

Japan’s benchmark Nikkei 225 lost 2.2% in morning trade to 26,410.30. The South Korean Kospi fell 0.9% to 2,621.24. Australia’s S&P/ASX 200 fell 1.3% to 7,110.50. The Shanghai Composite was little changed, falling less than 0.1% to 3,001.62. Markets were closed in Hong Kong for a national holiday.

Investors are watching the outcome of the presidential election in the Philippines, although it remains unclear how economic policies might change. The son of the long-ago ousted Philippine dictator, Ferdinand Marcos, is the leading candidate in Monday’s vote, according to most voter preference polls.

In addition to concerns about inflation and coronavirus restrictions, the war in Ukraine remains a major cause of uncertainty. More than 60 people are believed to have been killed after a Russian bomb razed a school used as a shelter, Ukrainian officials said. Moscow forces pushed their attack on the defenders inside the Mariupol steelworks in an apparent race to capture the city ahead of Russia’s Victory Day holiday on Monday.

“Russia’s VE Day today will also bring geopolitical risks back into the spotlight. President Putin is likely to reiterate his justification for war in Ukraine, but markets could watch for further efforts to step up military operations in order to secure war,” said Yeap Jun Rong, market strategist at IG in Singapore.

Stocks closed lower on Wall Street on Friday with the market’s fifth consecutive weekly decline. Concerns are simmering that despite strong employment trends in the United States, the Federal Reserve’s efforts to control inflation by raising interest rates could send the US economy into a recession.

Wednesday’s hike in the Fed’s short-term key rate lifted it 0.5 percentage points to a range of 0.75% to 1%, the highest level since the pandemic hit two years ago. .

The S&P 500 fell 0.6% to 4,123.34. The Dow Jones fell 0.3% to 32,899.37. The Nasdaq fell 1.4% to 12,144.66. Small businesses fell more than the overall market. The Russell 2000 slipped 1.7% to 1,839.56.

The Fed hopes to raise rates and slow the economy enough to stifle the highest inflation in four decades, but it risks stifling growth if it goes too far or too fast. Fed Chairman Jerome Powell reassured investors that the central bank was “not actively considering” an even bigger jump of 0.75 percentage points at its next meeting.

In energy trading, benchmark U.S. crude gained 43 cents to $110.20 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the oil pricing basis for international trade, rose 77 cents to $113.16 a barrel.

In currency trading, the US dollar fell from 130.55 yen to 130.98 Japanese yen. The euro traded at $1.0510, down from $1.0545.

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