Thursday, 7 July, 2022
E-paper

Asian markets follow Wall St plunge on inflation woes

Asian markets follow Wall St plunge on inflation woes

Popular News

HONG KONG: Markets tumbled in Asia on Monday and the dollar rallied as part of a global rout fuelled by a forecast-beating US inflation print that ramped up bets on a more aggressive campaign of Federal Reserve interest rate hikes.

Fresh Covid outbreaks in Shanghai and Beijing have also seen authorities reimpose containment measures soon after lifting them, leading to fears about the world's number two economy.

The possibility of more restrictions in China's biggest cities also weighed on oil prices, with concerns about a possible US recession and the stronger dollar adding to downward pressure on the black gold, reports AFP.

Investors were left surprised Friday when data showed US inflation jumped 8.6 percent in May, the fastest pace since December 1981, as the Ukraine war and China's lockdowns pushed energy and food prices.

The reading has led to fervent speculation that the Fed will now be contemplating a 75 basis point lift in interest rates at some point, though it is still expected to stick to a flagged half-point hike when it meets this week. With the central bank forced to be more aggressive, there is a concern that the US economy could be sent into recession next year. "For the last few weeks, there has been a cautious calm in markets -- rates not pricing anything unforeseen, and equities able to make small gains," said SPI Asset Management's Stephen Innes.