Asian Markets Track Wall St Lower As Recession Fears Return
Fahad Shabbir (@FahadShabbir) Published January 19, 2023 | 05:20 PM
Most stocks dropped alongside oil prices on Thursday and the dollar weakened after disappointing US data renewed worries about a recession in the world's biggest econom
Hong Kong, (UrduPoint / Pakistan Point News - 19th Jan, 2023 ):Most stocks dropped alongside oil prices on Thursday and the dollar weakened after disappointing US data renewed worries about a recession in the world's biggest economy.
The optimism that has flowed through trading floors since the start of the year has taken a knock this week as concern about inflation and rising interest rates are replaced by growth fears and their impact on company profits.
The downbeat mood overshadowed hopes that China's economy will enjoy a strong recovery this year -- having suffered its worst annual growth in 46 years in 2022 -- as it moves away from its zero-Covid policy.
All three main indexes on Wall Street sank more than one per cent on Wednesday in response to figures showing retail sales, and shrank at the quickest pace in more than a year, while producer prices fell the most since the beginning of the pandemic.
Industrial production also came in worse than forecast.
While data indicating the economy was struggling has in recent months spurred equities on hopes it will allow the Federal Reserve to slow down its pace of rate hikes, analysts said traders are now concerned about the economic outlook.
"'Bad news is bad news' once again for markets, with weak retail sales and industrial production seeing risk assets sell-off," said National Australia Bank's Tapas Strickland.
The data "adds to the theme of the economy slowing and heading into recession in 2023, and pushes back on the soft landing narrative dominating markets since January".
In early trade Tokyo, Hong Kong, Shanghai, Singapore and Manila all fell, though Sydney, Seoul and Jakarta edged up.
Wellington's NZX 50 and the New Zealand dollar suffered only small losses despite Prime Minister Jacinda Ardern's shock announcement that she will step down next month, saying she no longer has "enough in the tank".
Expectations that US interest rates will not rise as much as previously feared weighed on the dollar, with the yen bouncing back strongly after Wednesday's Bank of Japan decision not to further tweak monetary policy.
However, several Federal Reserve officials have pushed back against such speculation, warning they will continue to tighten policy until they have brought inflation down from its multi-decade highs.
Worries about recession were also weighing on oil prices, despite hopes for a spike in demand as China reopens to the world. Both main contracts dropped more than one percent in early exchanges.
But SPI Asset Management's Stephen Innes said Asian investors could be in for a positive year.
"The clear message to start 2023 has been clear as a whistle: while last year was about Fed and ECB normalisation, this year will be about China and Japan normalisation, which should continue to drive Asia's fortunes higher in 2023," he said in a note.
- Key figures around 0230 GMT - Tokyo - Nikkei 225: DOWN 1.2 percent at 26,468.62 (break) Hong Kong - Hang Seng Index: DOWN 0.7 percent at 21,526.99 Shanghai - Composite: DOWN 0.1 percent at 3,219.90 Dollar/yen: DOWN at 128.60 yen from 128.80 yen on Wednesday Euro/dollar: DOWN at $1.0785 from $1.0797 Pound/dollar: DOWN at $1.2322 from $1.2344 Euro/pound: UP at 87.51 pence from 87.43 pence West Texas Intermediate: DOWN 1.3 percent at $78.45 a barrel Brent North Sea crude: DOWN 1.1 percent at $84.02 a barrelNew York - Dow: DOWN 1.8 percent at 33,296.96 (close)London - FTSE 100: DOWN 0.3 percent at 7,830.70 (close)
Related Topics
Recent Stories
Tennis: ATP Barcelona Open results - 1st update
Swiatek's perfect 10 in Stuttgart as Vondrousova stuns Sabalenka
Arandu's roads closed due to flooding
Oil tanker catches fire in Islamabad’s Blue Area
Pakistan committed to ensure safety of foreign nationals: FO
Tennis: WTA Stuttgart results - 1st update
Four passengers injured as train hit an empty vehicle
Over- speeding bus crushed to death two bike riders
Turkey's Freedom Flotilla ready to set sail for Gaza
French teen dies from heart failure after knife attack near school
Iranians appear unfazed by Isfahan blasts
UAF celebrates Int'l Chinese Language Day
More Stories From Business
-
Pakistan aims to agree outline of new IMF loan in May - Finance Minister
10 hours ago -
FTO commends FBR's role for prompt resolution of tax payers’ issues
10 hours ago -
BISP embraces E-procurement: launches inaugural tender
12 hours ago -
Business community indebted to Ahsan Zafar for his unprecedented services: Yousuf Rajput
12 hours ago -
China auto sector steps up Europe push with Spain plant
12 hours ago -
Condolence reference held in memory of FBR's officials
13 hours ago
-
Health activists ring alarm bells over 10-stick cigarette pack
14 hours ago -
Karachi receives maiden direct flight of Azerbaijan Airlines from Baku
14 hours ago -
PSX turns bullish, gains 619 points
14 hours ago -
Rupee bounces back; gains 13 paisa against dollar
14 hours ago -
Partners join hands for alternate use of marble, granite slury
14 hours ago -
Tokyo's Nikkei index tumbles 3% in morning trade
16 hours ago