Asian stocks fall amid interest rates, earnings worry


TOKYO (AP) — Asian stocks fell on Monday after U.S. stocks ended last week on a slump as global market expectations for higher interest rates continued to set the tone.

Japan’s benchmark Nikkei 225 lost 1.9% in morning trade to 26,583.70. The South Korean Kospi fell 1.6% to 2,661.94. Hong Kong’s Hang Seng fell 2.8% to 20,064.32, while the Shanghai Composite lost 2.4% to 3,012.93. The trade was closed in Australia for Anzac Day, a national holiday.

News that Emmanuel Macron won the second round of the French presidential election over the weekend, winning a second term as expected, has reassured markets that France will not abruptly change course in middle of the war in Ukraine.

But a prominent performance by populist and nationalist candidate Marine Le Pen served as a reminder of just how fragile that situation could be, analysts said. Le Pen pledged to dilute French ties with the EU, NATO and Germany, and spoke out against EU sanctions on Russian energy supplies.

Rising COVID-19 cases in China are raising concerns about more pandemic lockdowns that would jeopardize economic recovery in the region. Other countries are also facing economic challenges related to COVID-19, such as the lack of tourism revenue in Japan, where cases continue to rise and fall as it gradually opens its borders, but only to travelers from business.

Investors are also watching corporate earnings reports, including big Japanese names coming in the coming weeks. Several reports from US companies, which have already been released, were disappointing, contributing to the slide that ended last week on Wall Street.

Investors are concerned about what the US Federal Reserve might do. The Federal Reserve chairman indicated that the central bank could raise short-term interest rates to double the usual amount in upcoming meetings, starting in two weeks. The Fed has already raised its overnight rate once, the first such hike since 2018.

The S&P 500 fell 2.8% on Friday to 4,271.78, marking its third consecutive losing week. The Dow Jones fell 2.8% to 33,811.40, its biggest drop in 18 months. The Nasdaq lost 2.6%, closing at 12,839.29. The Dow Jones and Nasdaq also posted losses for the week.

Shares of smaller companies also fell sharply. The Russell 2000 slipped 2.6% to 1,940.66.

“After the sell-off on Wall Street ended last week, overall risk appetite in the region may also be under pressure,” said Yeap Jun Rong, market strategist at IG in Singapore.

Markets around the world are feeling similar pressure on rates and inflation, especially in Europe as the war in Ukraine drives up oil, gas and food prices.

In energy trading, benchmark U.S. crude fell $2.91 to $99.16 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell $2.93 to $103.72 a barrel.

In currency trading, the US dollar fell slightly to 128.51 Japanese yen from 128.59 yen. The euro traded at $1.0789, down from $1.0803.


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