Hong Kong: Asian stock markets fell on Tuesday after Wall Street plummeted as investors become increasingly concerned about rising inflation, which could force central banks to cancel ultra-loose monetary policies ahead of time.
All eyes are on the important data released this week on US retail sales and consumer prices, which is expected to soar with the reopening of the world’s best economies and the return of vaccines to normalcy.
The high number of job creation mistakes in the United States last week showed that the recovery will not diminish as people think, but will allay these concerns, but the recovery of the commodities – especially the much-used copper and iron ore – has hit the market worried about rising costs. spiral.
This sign can be seen in China’s data, which shows that the prices paid at the gates of factories in that country last month rose the fastest in four years.
While the Fed has repeatedly pledged to hold on to its massive bond purchases and hold low interest rate positions for as long as necessary, until unemployment has subsided and inflation continues to rise, these concerns linger over the trading zone.
Although Fed bosses said that due to last year’s low comparison base, they believed the inflation rate would last for several weeks, but the higher data readings would put pressure on policymakers not to let this change change. of control.
“Inflationary concerns will dominate the focus this week, but the base effects are widely priced in and this upcoming reading will likely only serve as a baseline,” said OANDA strategist Edward Moya.
Even if investors are confident that the global economy is on its way to recovery, people still believe the problem will plague the market for some time to come.
Kristen Bitterly of Citi Private Bank told Bloomberg TV that given the uncertain growth path, “there is bound to be volatility in the coming months.”
The nervousness prior to the release of the US data prompted traders to rush to their door on Monday. The Dow Jones Index broke a record for three consecutive days. The Standard & Poor’s 500 Index fell more than 1% and the Nasdaq Index fell 2.6%. Technology companies are considered to be subject to higher financing costs.
Asia followed closely, Tokyo and Taipei each fell by more than 3%, while Hong Kong was down more than 2%. Sydney and Seoul were down more than 1%, while Shanghai, Singapore, Wellington, Manila, Mumbai, Bangkok and Jakarta also saw losses.
– Key figures around 0450 GMT –
Tokyo – Nikkei 225: DOWN 3.2 percent at 28,577.01
Hong Kong – Hang Seng Index: DOWN 2.2 percent at 27,982.21 (break)
Shanghai – Composite: DOWN 0.3 percent at 3,398.59 (break)
Euro/dollar: UP at $1.2144 from $1.2128 at 2100 GMT
Pound/dollar: UP at $1.4129 from $1.4117
Euro/pound: UP at 85.95 pence from 85.88 pence
Dollar/yen: UP at 108.84 yen from 108.77 yen
West Texas Intermediate: DOWN 0.7 percent at $64.47 per barrel
Brent North Sea crude: DOWN 0.7 percent at $67.84 per barrel
New York – Dow: DOWN 0.1 percent at 34,742.82 (close)
London – FTSE 100: DOWN 0.1 percent at 7,123.68 (close)