Asian markets, oil prices continue to lose on recession fears

A gas station employee updates the latest fuel prices on a bulletin board in Karachi on June 16, 2022, following a government increase in the price of petroleum products. (Photo by Asif HASSAN/AFP)

HONG KONG, China (AFP) – Asian markets fell again on Monday, as oil prices continued to fall on growing fears that the central bank’s move to curb soaring inflation will trigger a recession.

The losses came after last week’s sell-off, fueled by last week’s sharp Federal Reserve rate hike – the biggest in nearly 30 years – and a warning of more to come, while increases in the UK and Switzerland added to the gloom.

And while the S&P 500 and Nasdaq advanced on Friday, there is a sense that the indexes still have to go through some decline before they find a bottom, as economic data suggests that economies are beginning to feel difficult.

Cleveland Fed chief Loretta Mester added to the worries, saying the risk of a recession in the United States is increasing and it will take several years to bring inflation down from a 40-year high to the bank’s 2% target.

On Sunday, she told CBS “Face The Nation” that while she did not predict cuts, the Fed’s decision not to act sooner to combat rising prices was hurting the economy.

Asian traders struggled in early trading, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Seoul, Taipei, Jakarta and Wellington all in the red.

Analysts warn that traders are likely to face more challenges as the war in Ukraine drags on and uncertainty continues to reign.

An electronic quotation board displays the yen against the US dollar (top) and the share price of the Tokyo Stock Exchange (bottom) at a currency exchange brokerage in Tokyo on June 20, 2022. (Photo by Kazuhiro NOGI/AFP)

“Central bank hawkish rhetoric and fears of a global recession/recession are (not) helping the mood and it is hard to see a turn in fortunes at this stage until we see evidence of a significant easing in inflationary pressures,” National Australia said in a statement. Bank Rodrigo Catril.

And Stephen Innes of SPI Asset Management added: “Most of these big central banks are praying for some inflation reduction and hoping the data holds up, but unless the war between Ukraine and Russia is contained, the escalation will continue to affect energy prices. fears, so there may be a difficult road ahead.”

However, oil prices continued to fall on Monday after falling sharply on Friday, fueled by concerns about recession-driven demand.

However, US Energy Secretary Jennifer Granholm said prices could continue to rise if the European Union stops importing the commodity from Russia in response to the war in Ukraine.

She said Joe Biden has urged global suppliers to ramp up production to help contain rising prices, and the president will discuss the issue during an upcoming visit to Saudi Arabia next month.

– Key figures around 02:45 GMT –
Tokyo – Nikkei 225: DOWN 1.7% to 25,534.68 (close)

Hong Kong – Hang Seng Index: DOWN 0.4% to 21,001.43.

Shanghai – Composite: 0.3% down to 3308.08.

Dollar/Yen: DOWN to 134.85 yen from 134.99 yen on Friday evening.

Pound/dollar: DOWN $1.2219 from $1.2221

EUR/USD: UP $1.0509 from $1.0493

EUR/GBP: Up 86.00p from 85.83p

West Texas Intermediate: REDUCED 0.5% to $108.98.

Brent North Sea Oil: DECLINE 0.5% to $112.56 per barrel

New York-Dow: DOWN 0.1% to 29,888.78 (close)

London – FTSE 100: 0.4% down to 7,016.25 (close)

– Bloomberg News contributed to this story –

© Agence France-Presse