Asian stocks trail Wall St lower on rate hike, economy fears | Economic news

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By JOE McDONALD, AP Business Writer

BEIJING (AP) — Asian stocks followed Wall Street’s decline on Tuesday as fears grew that U.S. rate hikes to fight inflation could stall economic growth.

Market benchmarks in Tokyo, Hong Kong, South Korea and Australia fell. Shanghai has advanced. Oil prices fell more than $1 but remained above $100 a barrel.

Wall Street’s benchmark S&P 500 index fell 3.2% on Monday, hitting its lowest level in more than a year.

The Federal Reserve is trying to calm inflation, which is at its highest level in four decades, but investors fear it could trigger a slowdown in the United States. This adds to the pressure of Russia’s war against Ukraine and the Chinese slowdown.

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Traders are pricing the “imminent deterioration in economic conditions,” IG’s Yeap Jun Rong said in a report.

The Nikkei 225 in Tokyo fell 0.8% to 26,117.76 and the Hang Seng in Hong Kong fell 2.8% to 19,436.73.

The Shanghai Composite Index gained 0.2% to 3,009.22 after the Chinese government announced rent cuts and other aid for small businesses in a renewed effort to spur sluggish economic growth.

Seoul’s Kospi fell 0.7% to 3,593.12 and Sydney’s S&P-ASX 200 fell 1.2% to 7,034.90.

The India Sensex opened 0.1% higher at 54,537.35. Markets in New Zealand and Southeast Asia declined.

On Wall Street, the S&P 500 fell to 3,991.24. That leaves Wall Street’s benchmark index down 16.8% from its January 3 high.

The Dow Jones Industrial Average fell 2% to 32,245.70. The Nasdaq composite slid 4.3% to 11,623.25 as tech stocks are the best-selling.

Energy stocks also fell. Marathon Oil and APA Corp. each sank more than 14%.

Stocks fell as the Fed shifted away from a strategy of pumping money into the financial system, which drove prices higher.

The U.S. central bank has raised its key rate from near zero, where it has sat for much of the coronavirus pandemic. Last week, it indicated it would double the size of future increases from its usual margin.

In energy markets, benchmark U.S. crude fell $1.15 to $101.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged from $6.68 to $103.09 on Monday. Brent crude, the price basis for international oil trade, fell $1.20 to $104.74 a barrel in London. It fell from $6.45 the previous session to $105.94.

The dollar gained 130.43 yen from 130.32 yen on Monday. The euro fell from $1.0566 to $1.0576.

Copyright 2022 The Associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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