Global stock market sales deepen as reflection trade disintegrates
Global stocks sank on Monday as Asian sales deepened as the U.S. central bank’s attitude to inflation changed dramatically.
Japan’s Topix index fell 2.6% in the region’s early trading, while Australia’s S & P / ASX 200 fell 1.9 percent. The Hang Seng index in Hong Kong and Kospi in South Korea fell 1.1 percent. China’s CSI listed on Shanghai and Shenzhen fell 0.2 percent 0.2 percent.
After these falls worst week For almost four months for the reference of the S&P 500 shares on Wall Street. Comments on Wednesday from Federal Reserve Chairman Jay Powell affected the sale pointed out the central bank could raise investments earlier than expected to tame inflation, rather than keep the aid policy indefinite.
Sudden changes have led investors to take advantage of so-called “reflective trading” stocks or take advantage of higher inflation, which has dominated markets since the Covid-19 vaccine was pushed in late last year.
Futures for the S&P 500 fell 0.3 percent in Asian trade on Monday, while the FTSE 100 in London fell 0.5%. The S&P 500 fell 1.3 percent on Friday.
Comments from St. Louis Fed President James Bullard also affected market sentiment, suggesting that the U.S. could raise rates by the end of 2022 if inflation is higher than expected. The Fed also said last week that it would soon begin discussing buying a $ 120 billion bond a month.
“This seems like a market that invested too much in the previous Fed story, and that may have taken it very literally,” said Robert Carnell, ING’s head of Asia-Pacific research. “It seems that central banks are not able to control the reality shock that markets suffer when they are exposed to a more reasonable version of future events.”
The U.S. 10-year Treasury yield rose 0.03 percentage points to 1.408 percent on Monday. Bond prices fall as profits rise.
Commodity prices stabilized after falling last week. Crude Brent, an international benchmark for oil, rose 0.9 percent to $ 74.20 a barrel. The US West Texas Intermediate rose 1 percent to $ 72.33.