Economy · June 24, 2022

Asian markets, oil prices extend losses on recession fears

A gas station employee updates the latest fuel prices on a billboard in Karachi on June 16, 2022, after a government hike in oil prices. (Photo by Asif HASSAN / AFP)

HONG KONG, China (AFP) – Asian markets fell again on Monday and oil prices extended losses amid growing fears that central bank moves to curb rising inflation will induce a recession.

The losses come after a sell-off last week fueled by the Federal Reserve’s sharp rise in interest rates last week – the largest in nearly 30 years – and a warning that more will follow, as hikes in Britain and Switzerland have added to the darkness.

And while the S&P 500 and Nasdaq posted gains on Friday, there is a sense that indices still have a long way to go before hitting a low, with economic data suggesting economies are starting to feel the blow.

Cleveland Fed chief Loretta Mester added to the concern, saying that the risk of a recession in the United States was increasing and that it would take several years to bring inflation from four-decade highs to the two percent target. bank.

He told CBS’s Face The Nation on Sunday that while he wasn’t expecting a contraction, the Fed’s decision not to act sooner to combat rising prices was hurting the economy.

At the start of the trade, Asian traders were struggling, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul, Taipei, Jakarta and Wellington all in red.

Analysts have warned that there is likely to be more pain for traders as the war in Ukraine drags on and uncertainty continues to reign.

An electronic quote card shows the yen rate against the US dollar (top) and the Tokyo Stock Exchange share price (bottom) at a currency exchange agency in Tokyo on June 20, 2022. (Photo by Kazuhiro NOGI / AFP)

“Aggressive central bank rhetoric and concerns about a slowdown / recession in the global economy are not helping sentiment and at this stage it is difficult to see a turnaround in fortunes until we see evidence of a substantial easing of inflationary pressures,” he said. National Australia’s Rodrigo Catril Bank.

And Stephen Innes of SPI Asset Management added: “Most of these big central banks are praying for some inflation relief and hoping that the data is in line, but unless there is a standstill in the war. Ukraine-Russia escalation will continue to drive energy price fears, so it could be a tough road to go. “

However, oil prices fell further on Monday after falling sharply on Friday caused by demand concerns caused by a possible recession.

However, US Energy Secretary Jennifer Granholm said prices could continue to rise if the European Union stops importing the goods from Russia in response to the war in Ukraine.

He said Joe Biden has called on global suppliers to increase production to help moderate price increases, with the president to discuss the matter on an upcoming visit to Saudi Arabia next month.

– Key figures around 0245 GMT –
Tokyo – Nikkei 225: DOWN 1.7% at 25,534.68 (close)

Hong Kong – Hang Seng Index: DOWN by 0.4% to 21,001.43

Shanghai – Composite: DOWN 0.3 percent to 3,308.08

Dollar / yen: DOWN to 134.85 yen from 134.99 yen in late Friday

Pound / dollar: DOWN to $ 1.2219 from $ 1.2221

Euro / dollar: UP to $ 1.0509 from $ 1.0493

Euro / pound: UP to 86.00 pence from 85.83 pence

West Texas Intermediate: DOWN 0.5 percent to $ 108.98

Brent crude from the North Sea: DOWN by 0.5% to 112.56 dollars a barrel

New York – Dow: DOWN 0.1% at 29,888.78 (close)

London – FTSE 100: DOWN 0.4% to 7,016.25 (close)

– Bloomberg News contributed to this story –

© Agence France-Presse