HONG KONG: Asian shares mostly fell on Tuesday, as oil prices tumbled after Wall Street slumped, amid concerns over rising U.S. interest rates, soaring inflation and the impact of China’s prolonged lockdown measures.
Global stock markets have been on a tear this year, with Wall Street plunging again on Monday, with the tech-heavy Nasdaq tumbling more than 4% and the S&P 500 closing below 4,000 for the first time since March 2021.
The bloodshed was also accelerated by a sharp drop in Chinese exports in April — as Beijing steadfastly adhered to a zero-virus policy, moving millions indoors — and in part due to volatility in crude prices due to Russia’s war in Ukraine.
“We don’t normally pay too much attention to short-term market movements, but there’s some concern brewing in markets that we might be on the cusp of a significant event,” said Peter Esho, co-founder at Wealthi, an investment property platform.
“Ultimately, our view is that each and every time the US Federal Reserve seeks to raise rates, the economy and growth will break and send us back to square one.”
US stock markets dived late last week after the Federal Reserve raised interest rates by a half-percentage point and flagged more aggressive hikes ahead to tackle decades-high inflation.
Further stoking global inflationary pressures were lockdowns across dozens of Chinese cities — from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket of Jilin — which has wreaked havoc on supply chains over recent months.
The equities plunge persisted Monday on Wall Street, while Frankfurt, London and Paris all fell more than two percent.
Tokyo on Tuesday opened down 0.7 percent, with Japanese traders fretting over US monetary tightening. Seoul, Wellington, Singapore, and even Jakarta — the lone bright spot over the past couple days — also slumped.
“The market is becoming increasingly non-investable,” said Stephen Innes of SPI Asset Management.
“We could be nearing the capitulatory ‘sell-everything mode’ as it is virtually impossible to construct a bullish argument for the broader market.”