Stocks were mixed on Monday in Asia after Wall Street recorded its worst week since the pandemic began in 2020.
Benchmarks fell in Hong Kong, Seoul and Sydney but rose in Tokyo. Shanghai has changed little. US futures were higher.
Investors are increasingly worried about how aggressively the Federal Reserve, which is holding a policy meeting this week, might act to rein in rising inflation.
Historically low interest rates, called quantitative easing, or QE, have helped support the broader market as the economy absorbed a heavy hit from the pandemic in 2020 and then recovered over the past two years.
“The FOMC (Fed) meeting dominates the macro calendar this week and should keep risk sentiment on the tentative side with the end of QE and imminent rate hikes likely to be announced,” said economists Nicholas Mapa and Robert ING’s Carnell in a statement. remark.
Some economists believe the US central bank needs to act faster to curb soaring prices by raising rates. Consumer prices in the United States rose 7% in December from a year earlier, the largest increase in nearly four decades.
Rising costs have also raised fears that consumers will begin to cut back on spending due to continued pressure on their wallets. At the same time, outbreaks of the omicron variant of the coronavirus threaten to slow recovery from the crisis.
Tokyo’s Nikkei 225 index edged up 0.2% to 27,588.37, while Hong Kong’s Hang Seng fell 1% to 24,721.49. In Australia, the S&P/ASX 200 lost 0.5% to 7,139.50 and India’s Sensex fell 1.7% to 58,072.62.
South Korea’s Kospi fell 1.5% to 2,794.26 on the back of a sell-off from big tech companies like Samsung and LG Chemical. The Thai SET lost 0.6%.
The Shanghai Composite Index gained less than 0.1% to 3,524.11.
On Friday, the benchmark S&P 500 fell 1.9% to 4,397.94, down 5.7% for the week in its worst weekly loss since March 2020.
The tech-heavy Nasdaq Composite Index fell 2.7% to 13,768.92. It has fallen for four consecutive weeks and is now more than 10% below its most recent peak, putting it in what Wall Street considers a market correction.
The Dow Jones Industrial Average fell 1.3% to 34,265.37.
Peloton rose 11.7% after the maker of exercise bikes and treadmills said second-quarter revenue would meet previous estimates. The stock fell a day earlier after CNBC reported that Peloton was temporarily halting production of exercise equipment to stem a drop in sales.
With investors expecting the Fed to start raising rates as soon as its March policy meeting, expensive tech stocks and other expensive growth stocks now look relatively less attractive.
Technology and communications stocks were among the market’s biggest drags on Friday. Video streaming service Netflix plunged 21.8% after posting another quarter of disappointing subscriber growth. Disney, which has also been trying to grow its subscriber base for its streaming service, fell 6.9%.
Treasury yields have fallen as investors turn to safer investments. The 10-year Treasury yield was flat Monday at 1.77%.
The Fed’s benchmark short-term interest rate is currently in a range of 0% to 0.25%. Investors now see a nearly 70% chance that the Fed will raise the rate by at least one percentage point by the end of the year, according to the CME Group’s Fed Watch tool.
In other trading, the benchmark U.S. crude oil gained 55 cents to $85.69 a barrel in electronic trading on the New York Mercantile Exchange. It fell 41 cents to $85.14 a barrel on Friday.
Brent crude, the pricing basis for international oils, added 59 cents to $88.48 a barrel.
The US dollar fell from 113.68 yen to 113.82 Japanese yen. The euro slipped to $1.1319 from $1.1346.