Asian stocks follow Wall Street drop after warning of US recession

Beijing – Asian stock markets fell Thursday after the Federal Reserve said economists expected a “moderate recession” this year.

Shanghai, Hong Kong, Seoul and Sydney withdrew. Advance to Tokyo. Crude oil prices fell.

Wall Street closed lower on Wednesday as economists expected a decline in bank lending to trigger a “mild recession,” according to the central bank’s latest meeting memo. . Traders had already seen a growing likelihood of at least a short-lived US recession this year. rate hikes to curb inflationConsumer prices rose 5% in March, well above the Fed’s 2% target, according to government data.

IG’s Yeap Jun Rong said in a report that “recession fears are brewing and risk sentiment appears to be waning.” Federal Reserve report ‘erodes soft-landing scenario chatter’.

The Shanghai Composite Index fell 0.4% to 3,312.79 while Tokyo’s Nikkei 225 rose 0.2% to 28,140.27. Hong Kong’s Hang Seng Index fell 0.7% to 20,160.84.

Seoul’s Kospi rose 0.1% to 2,548.61 while Sydney’s S&P ASX fell 0.4% to 7,313.90.

India’s Sensex opened 0.4% lower at 60,149.89. New Zealand and Singapore rose while Jakarta fell.

Traders believe the Federal Reserve and other central banks in Europe and Asia are pushing the global economy toward recession as they try to contain inflation near multi-decade highs. I am afraid that

That fear was temporarily drowned out by concerns over the health of two global banks. famous failure in the US and one in Switzerland. However, regulators appear to have quelled those concerns by promising more loans and other measures as needed to stabilize banks.

On Wall Street, the benchmark S&P 500 Index fell 16.99, or 0.4%, to 4,091.95. About 65% of the stocks in the index have fallen.

The Dow Jones Industrial Average fell to 38.29, or 0.1%, to 33,646.50. The Nasdaq Composite fell 102.54, or 0.9%, to 11,929.34.

Most traders expect the Fed to raise short-term rates by another 0.5% at its next meeting, according to CME Group data. They reversed some bets on the possibility that the Fed would just keep rates on hold in May. This hasn’t been done in over a year.

Traders expect the Fed to have to cut interest rates later this year to support the economy.

The bond market shows fears of a potential recession. The 10-year Treasury yield fell to 3.41% from 3.43% late Tuesday. Two-year US Treasury yields driven by expectations for the US Federal Reserve (Fed) fell to 3.96% from 4.03%.

Investors are looking forward to the US company’s latest quarterly earnings report due out this week.

Expectations are low. Analysts are predicting the worst drop in earnings per share for the S&P 500 since the pandemic devastated his economy in 2020. However, many expect this to bottom out and return to growth later this year.

In the energy market, US benchmark crude fell 32 cents to $82.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.73 to $83.26 on Wednesday. Brent crude, the price benchmark for international oil trading, fell 40 cents to $86.93 a barrel in London. It rose $1.72 from the previous session to $87.33.

The dollar rose to 133.35 yen from 133.19 yen on Wednesday. The dollar fell from he $1.0995 to he $1.0986.