Asian markets slump for third day in a row on fears of global recession

Asian markets slump for third day in a row on fears of global recession

BEIJING – Asian stocks fell for the third day in a row on Friday after more rate hikes by the Federal Reserve and other central banks to contain ongoing inflation, fueling fears of a possible global recession.

The Shanghai Composite Index SHCOMP,
-0.66%
fell 0.9% and the Hang Seng HSI in Hong Kong,
-1.14%
lost 0.7%. The Kospi 180721,
-1.81%
in Seoul fell 1.5%.

Sydney’s S&P/ASX 200 XJO,
-1.87%
fell 1.8%. Benchmarks in New Zealand NZ50GR,
-0.72%,
Singapore STD,
-1.12%,
Taiwan Y9999,
-1.16%,
Malaysia FBMKLCI,
-0.74%
and Indonesia JAKIDX,
-0.55%
all rejected.

The Japanese markets were closed for a holiday.

Wall Street’s benchmark S&P 500 index fell for a third day on Thursday after rate hikes by central banks in Britain, Switzerland, Turkey and the Philippines. The Fed raised its key rate for the fifth time this year on Wednesday, signaling more hikes to come.

“Global equities are struggling as the world expects rising interest rates to trigger a much faster and potentially severe global recession,” Oanda’s Edward Moya said in a report.

The S&P 500 SPX,
-0.84%
lost 0.8% to 3,757.99. The Dow Jones Industrial Average DJIA,
-0.35%
fell 0.4% to 30,076.68 and the Nasdaq composite COMP,
-1.37%
slipped 1.4% to 11,066.81.

The sale reflects investors’ fears that the Fed and other central banks would be willing to tolerate a deep slowdown in economic activity in order to bring prices under control.

Some point to signs that the US economy is cooling in support for the Fed to call off plans for more rate hikes. But Chairman Jerome Powell said on Wednesday that the Fed will hold rates higher for longer if necessary to bring inflation back to its 2% target.

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