Asian Stock Market Went Down Following Wall Street’s Decline Due To Rate Hike Concerns
In today’s trading session, most Asian stocks experienced a decline, mirroring the patterns of Wall Street, which witnessed its most significant drop in weeks, interrupting a steady bullish activity.
Investors remain skeptical about the anticipated interest rate cuts by the US Federal Reserve this year. In addition, a massive earthquake in Taiwan further contributed to the sense of gloom.
For months, traders have pushed equity prices upwards, fueled by optimism that the central bank will begin easing its monetary policy this year as inflation comes back towards officials’ 2% target.
However, the data release exceeding forecasts across various indicators such as inflation, factory activity, and employment has dealt a significant blow to those expectations, causing them to diminish.
Analysts are also concerned that the distress gripping Wall Street could spill over into the Asian market despite the recent positive economic signal from China.
Stephen Innes of SPI Asset Management commented “There is a struggle among investors with the potential that this wave of market turbulence might lead to a much greater downturn.”
Remarkably, China has proposed a forecasted growth of around 5% in economic activity for this year, indicating expectations for recovery from the real estate sector and the residual effects of the pandemic.
Japan’s Nikkei 225 index dropped by 0.8% settling at 39,511.88 during today’s morning session. In Australia, the S&P/ASX 200 declined by 1.3%, trading at 7,782.50. South Korea’s Kospi also experienced a 1.4% drop, standing at 2,714.18 while the Hang Send index went down by 1.1%, trading at 16,753.82. The Shanghai Composite also slipped by 0.2% trading at 3,070.04.
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