June 29, 2022

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Stocks fall as global growth fears escalate

Stocks fall as global growth fears escalate

FILE PHOTO – An investor sits in front of a board displaying stock information at a brokerage office in Beijing, China, December 7, 2018. REUTERS/Thomas Peter

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BEIJING/HONG KONG (Reuters) – Asian stocks fell on Thursday, tracking a sharp selloff on Wall Street as investors worried about global inflation, China’s non-spreading coronavirus policy and Ukraine war, while the safe-haven dollar slipped.

European stock markets also looked set for another rough day, with Eurozone Stoxx 50 futures down 0.52%, German DAX futures down 0.63%, and FTSE futures down 0.51%.

Nasdaq futures slipped 0.15%, although S&P500 futures reversed earlier losses to become 0.05% higher.

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Overnight on Wall Street, retail giant Target Corp. (TGT.N) It warned of a larger margin exposure due to higher costs as it announced that its quarterly profit had been halved. Its shares plunged 24.88%. The Nasdaq is down about 5% while the S&P 500 is down 4%.

“The bounce on Tuesday has proven to be ‘too optimistic’, so the self-doubt caused by the miscalculation is making traders more difficult to click on the sell button,” said Hebei Chen, market analyst at IG.

MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) It snapped four days of gains and fell 1.8%, dragged down by a 1.5% loss for the resource-heavy Australia benchmark. (.AXJO)down 2.1% in Hong Kong shares (.HSI) And fell 0.3% in the charts of mainland China (.CSI300).

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Japan’s Nikkei Index (.N225) fall 1.7%.

Hong Kong listed technology giants (.HSTECH) In particular, the index fell by more than 3%. Tencent (0700.HK) It sank more than 6% after it reported no revenue growth in the first quarter, the worst performance since it went public in 2004. Read more

China’s tech sector continues to suffer from a year-long government crackdown and sluggish economic prospects caused by Beijing’s strict non-spreading coronavirus policy, despite soothing comments from Vice Premier Liu He to tech executives that boosted sentiment on Wednesday. Read more

Two US central bankers say they expect the Federal Reserve to move to a more measured pace of policy tightening after July as it seeks to cool inflation without raising borrowing costs so high that it drives the economy into recession. Read more

“It must be said that anxiety about inflation has never gone away since we entered 2022. However, while things have not reached the point of no return, they do appear to be heading towards ‘out of control.’ That is perhaps the most exciting part. to worry about the market,” IG’s Chen said.

The US dollar, which had rebounded as risk appetite declined, fell 0.15% against a basket of major currencies, after a 0.55% jump overnight that ended a three-day losing streak.

The Australian dollar rose 0.8%, while the New Zealand dollar rebounded 0.6%, as easing in Shanghai’s COVID lockdown helped sentiment.

Data on Wednesday showed that British inflation rose to its highest annual rate since 1982 as energy bills rose, while Canadian inflation rose to 6.8% last month, driven largely by higher food and shelter prices.

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Bilal Hafeez, chief executive of London-based research firm MacroHive, said there is a strong bias towards safe haven assets at the moment, particularly cash.

“There may be a short-term bounce in equities like the past few days, but the big picture is that the era of low yields is over, and we are moving into a higher rates environment,” Hafeez told the Reuters Global Markets Forum.

“This will put pressure on all the markets that have benefited from the lower returns – especially stocks.”

US Treasuries rose overnight and largely settled in Asia, leaving the yield on the benchmark 10-year Treasury at 2.9076%.

The two-year yield, which rose as traders expected an increase in the Fed funds rate, rose to 2.6800% compared to the US close of 2.667%.

Oil prices recovered from early losses, as persistent concerns about tight global supplies overshadowed concerns about slowing economic growth.

Brent crude rose 1.2 percent to $110.41 a barrel, while US crude rose 0.8 percent to $110.48 a barrel.

Gold was a little lower. Spot gold was trading at $1,814.88 an ounce.

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Additional reporting by Divya Chowdhury. Editing by Sam Holmes, Kenneth Maxwell and Kim Coogill

Our criteria: Thomson Reuters Trust Principles.