Stocks, Oil Plunge As Renewed Recession Fears Send Traders Running
Mohammad Ali (@ChaudhryMAli88) Published June 22, 2022 | 02:10 PM
Hong Kong, (UrduPoint / Pakistan Point News - 22nd Jun, 2022 ) :Equities and oil prices tumbled Wednesday after a brief respite from last week's painful rout across world markets, with recession fears continuing to build as central banks hike interest rates to combat decades-high inflation.
While Asia, Wall Street and Europe all enjoyed healthy gains on Tuesday, analysts warned the downbeat mood on trading floors means the selling is unlikely to end any time soon.
Federal Reserve boss Jerome Powell's two-day testimony to Congress this week will be pored over for an idea about officials' plans for fighting runaway prices, which are being fanned by supply chain snarls, China's lockdowns and the war in Ukraine.
Most observers expect them to hike rates by three-quarters of a point several more times this year, having announced such a move this month -- the sharpest lift in almost 30 years.
However, while many believe the Fed's front-loaded tightening drive is needed -- allowing it to begin cutting sooner as price rises settle back -- there is a building consensus that the world's top economy is heading for a contraction next year.
"The Fed has entered into a policy cocktail that we would describe as hammer time," Gene Tannuzzo, at Columbia Threadneedle Investments, told Bloomberg Television.
"You have to be planning defensively at this point. There are a lot of questions on all risk assets."In Asian trade, Hong Kong, Tokyo, Shanghai, Sydney, Singapore, Seoul, Manila, Taipei, Jakarta and Bangkok were all deep in the red.
London followed suit, dropping more than one percent after official data showed UK inflation had reached a fresh 40-year high. Paris and Frankfurt were also sharply lower.
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