Global equities are falling as inflation frightens investors
Shares fell across Europe and the Asia-Pacific on Thursday, when Wall Street feared U.S. inflation in the previous session as it entered global stock markets.
The European Stoxx 600 index fell 0.8 per cent in first trades, while the UK FTSE 100 fell 1.3 per cent.
The Japanese Topix closed 1.5 percent lower, bringing weekly losses to 4.4 percent. The CSI 300 index of shares listed in China’s Shanghai and Shenzhen fell 1.2 percent. All other major Asian lessons were also in red.
The losses occurred after official U.S. data was shown inflation rose 4.2 percent year-on-year in April, prices rose at a faster pace than economists had predicted.
Reading terrifying markets, As the S&P 500 closed 2.2 percent, the worst performance the Wall Street benchmark has had since February.
The prospect of sustained higher inflation could depress the equity and debt markets by lowering real returns on dividend or fixed interest payments, leading to lower stock and bond prices.
The 10-year U.S. Treasury yield, which is moving in the opposite direction of the price, rose in New York trading on Wednesday before stabilizing at 1.674 percent in the first session of Europe, down 0.03 percentage points.
Wednesday’s data shows that the U.S. Federal Reserve, the world’s most powerful central bank, could speed up the $ 120 billion bond buyback period that has allowed financial markets to support it since March.
A senior Federal Reserve official has reduced inflation risks this week. “transient wave”.
“The Fed’s insistence that inflation is only transient for the audience,” said Tai Hui, JPMorgan Asset Management’s chief Asia market strategist. “But if inflation data doesn’t calm down in the coming months, the challenge of credibility could be confusing.”
Shares of technology in the U.S. hit hard as the Nasdaq fell 2.7 percent. They also weakened in Europe and Asia. The sector’s valuation rose as houses were closed during the pandemic, online shopping and socialization took place, but today they are particularly weak for market correction.
In Hong Kong, Tencent and Alibaba fell more than 2 percent. The Tokyo-listed technology conglomerate SoftBank lost 2.7 percent maximum yield recorded days earlier for a Japanese company. Stoxx’s technology subscription fell 1 percent.
Taiwan’s Taiex technology index fell to 3.4% before most of those losses were matched. It also has country benchmarks has suffered this week In the recovery of Covid-19.
U.S. inflation data came after a period of global warming commodity prices have jumped, due to high demand and tight supply. Investors also see it as a hedge against inflation. Iron ore prices hit a record high in dollars on Monday.
The rise in commodity prices boosted the Chinese producer’s price index – a measure of inflation at factory doors. the highest level in three years in April, growth in the country’s consumer price index remained below 1 percent.
On Thursday, iron ore and crude oil, among others, fell. Brent oil benchmark international benchmark fell 1.4 percent to $ 68.33 a barrel. US Colonial Pipeline, which transports fuel across the country, operations resumed after being shut down by a cyber attack last Friday.
Gold rose 0.2 percent to $ 1,819.76 a troy ounce.