[ad_1]
Global stocks sank as sales on Monday saw a negative shift in the U.S. central bank’s stance on inflation in Asia.
Japan’s Topix index fell 2.6% in first operations in the region, while Australia’s S & P / ASX 200 fell 1.9%. Hong Kong’s Hang Seng index fell 1.4% and South Korean Kospi fell 1.1%.
Those falls followed the worst week for the Wall Street S&P 500 benchmark in nearly four months. The sale was prompted by comments from Federal Reserve Chairman Jay Powell on Wednesday signposted the central bank could raise rates to domesticate inflation earlier than investors had previously thought, rather than maintain an indefinite support policy.
The sudden change caused investors to shy away from the shares favored in the so-called “reflation trade,” or those benefiting from higher inflation, which has dominated markets since the launch of vaccination stocks. against Covid-19 late last year.
S&P 500 futures fell 0.5 percent in Asian trading on Monday, while London’s FTSE 100 fell 0.8 percent. The S&P 500 fell 1.3% on Friday.
Market sentiment was also affected by comments from St Louis Fed Chairman James Bullard, who suggested that the US could raise rates as early as the end of 2022 in the event of higher-than-expected inflation. The Fed also noted last week that it would soon begin discussing when to cut monthly bond purchases by $ 120 billion.
“It looks like a market that has invested too much in the Fed’s previous history, something that may have been taken too literally,” said Robert Carnell, ING’s Asia-Pacific research chief. “It seems that central banks cannot control the shock of reality coming to the markets when a more reasonable version of future events is revealed to them.”
“Surprised investors may further reduce short-term reflation operations,” added Mansoor Mohi-uddin, chief economist at the Bank of Singapore. “But falling inflation expectations will allow the Fed to only decline in 2022, helping to restore sentiment over the summer.”
In bonds, the 30-year US Treasury yield fell 0.02 percentage points to 1.99% on Monday, marking the first drop below 2% since February as pressure eased. increase in reflation business.
Commodity prices stabilized after falling last week. Brent crude, the international benchmark for oil, rose 0.4 percent to $ 73.82 a barrel. US West Texas Intermediate rose 0.5 percent to $ 72.03.
In China, the CSI 300 index of listed shares in Shanghai and Shenzhen fell 0.6% after banks suspended the country’s benchmark loan rate. Lenders compare new loans against the rate.
[ad_2]
Source link
