Stocks fluctuate as traders fret over recession

Stocks fluctuate as traders fret over recession

Asian markets were mixed and oil fell as traders fret over a possible recession caused by central bank interest rate hikes
Asian markets were mixed and oil fell as traders fret over a possible recession caused by central bank interest rate hikes. Photo: Daniel ROLAND / AFP
Source: AFP

New feature: Check out news exactly for YOU ➡️ find “Recommended for you” block and enjoy!

Markets swung Monday as traders fret over a possible recession caused by central bank interest rate hikes aimed at fighting soaring inflation.

Data showing a flare-up of fresh Covid-19 cases in China revived concerns about the government's policy of locking down towns and cities to eradicate the disease, despite the economic cost.

After the S&P 500's worst January-June since 1970, Wall Street got the second half off to a healthy start Friday as a below-forecast reading on US manufacturing provided hope banks will not go on an extended period of monetary tightening.

That followed a drop in confidence among consumers -- a key driver of the world's top economy.

However, National Australia Bank's Rodrigo Catril said the Federal Reserve and other global financial chiefs might not ease back on their rate hikes too soon as inflation remains stuck around multi-decade highs.

Read also

Stocks choppy, dollar frothy

"While the data is suggesting a US economic slowdown is coming, we are not yet seeing signs of an ease in inflationary pressures, an important distinction given the Fed will continue with its aggressive tightening approach until it sees evidence of the latter," he said in a commentary.

PAY ATTENTION: Enjoy reading our stories? Join YEN.com.gh's Telegram channel for more!

In a sign of the struggle officials will have in controlling rising prices, figures showed eurozone inflation hit a record 8.6 percent in June. The European Central Bank is due to lift rates this month for the first time in more than a decade.

Still, while surging prices remain a huge problem, Chris Weston, at Pepperstone Group, said the psychology is "shifting radically from inflation concerns to one now where we're firmly focused on growth".

While New York provided a strong lead, Asia struggled.

Hong Kong dropped as investors returned from a long weekend to play catch-up with Friday's losses, while Seoul, Taipei, Bangok and Jakarta were also down.

Read also

Eurozone inflation hits record, as gas crunch looms

However, Tokyo, Shanghai, Mumbai, Sydney, Singapore, Taipei and Wellington rose.

London, Paris and Frankfurt rose at the open, though US futures were in the red.

A rise in new Covid cases in China over the weekend weighed on sentiment among investors who fear a return to the painful lockdowns in major cities including Shanghai, which hammered the world's number two economy.

The country saw more than 700 new infections Saturday and Sunday, having held below 50 a day for the previous two weeks.

Macau saw its first two Covid deaths at the weekend and authorities said they would consider a city-wide lockdown to fight the disease. The comments sent Hong Kong-listed shares in Macau casinos plunging.

Oil prices edged up but concerns about recession weighed on sentiment as traders bet on a drop in demand, while the head of Asia at crude trading giant Vitol said he saw signs consumers were beginning to feel the pressure of high commodity costs.

Read also

Asian markets struggle as traders gripped by recession fear

"There's very clear evidence out there of economic stress being caused by the high prices, what some people refer to as demand destruction," said Mike Muller. It is "not just oil, but also liquefied natural gas".

Key figures at around 0720 GMT

Tokyo - Nikkei 225: UP 0.8 percent at 26,153.81 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 21,825.32

Shanghai - Composite: UP 0.5 percent at 3,405.43

London - FTSE 100: UP 0.8 percent at 7,227.03

Dollar/yen: UP at 135.42 yen from 135.28 yen Friday

Pound/dollar: DOWN at $1.2095 from $1.2098

Euro/dollar: DOWN at $1.0423 from $1.0433

Euro/pound: DOWN at 86.15 pence from 86.21 pence

West Texas Intermediate: UP 0.4 percent at $108.85 per barrel

Brent North Sea crude: UP 0.5 percent at $112.15 per barrel

New York - Dow: UP 1.1 percent at 31,097.26 (close)

-- Bloomberg News contributed to this story --

New feature: Check out news exactly for YOU ➡️ find "Recommended for you" block and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.