After Wall Street’s weekly loss, Asian stocks fell on rate concerns.

Anxiety over the Federal Reserve’s intentions for more interest rate rises to reduce inflation caused Asian stock markets to plunge on Monday after Wall Street posted a loss for the week.

The benchmark in Hong Kong decreased by more than 3%. Sydney, Shanghai, and Tokyo all shrank back. Prices for oil dropped.

After a Fed member named James Bullard alarmed investors by indicating that the U.S. central bank’s base lending rate could need to be hiked to as much as nearly double its current high level, all the major U.S. stock indexes concluded the week with losses.

Bullard “dimmed the light on rallies,” according to a report by Tan Boon Heng of Mizuho Bank.

After John Lee, the ruler of the territory, tested positive for the coronavirus during a visit in Bangkok, the Hang Seng in Hong Kong fell 3.02% to 17,448.64.

The Nikkei 225 in Tokyo down 0.1% to 27,873.19 and the Shanghai Composite Index fell 0.7% to 3,074.26.

South Korea’s Kospi decreased by 1.3% to 2,413.36 while Sydney’s S&P-ASX 200 down by 0.1% to 7,143.50.

Singapore declined, while gains were made by New Zealand, Bangkok, and Indonesia.

The benchmark S&P 500 index for Wall Street increased 0.5% to 3,965.34 on Friday. To 33,745.69, the Dow Jones Industrial Average increased by 0.6%. Less than 0.1% of the Nasdaq composite fell to 11,146.06.

After Bullard, president of the St. Louis Federal Reserve Bank, made a presentation that suggested the Fed’s benchmark rate could need to increase to between 5% and 7%, all the major U.S. indices concluded the week with losses. Following four increases of 0.75 percentage points, or three times the Fed’s customary buffer, that would increase from its current level of 3.75% to 4%.

Investors are concerned that the Fed’s and other central banks’ repeated rate increases this year to combat rising inflation might push the world economy into a recession.

Traders are hoping that the Fed will scale back its plans as a result of signs that economic activity is slowing and inflation pressures are easing. In order to put an end to inflation, rates may need to remain high for a considerable amount of time, according to Fed officials, including chair Jerome Powell.

At its meeting in December, the Fed is anticipated to increase its benchmark interest rate once again, although by a narrower margin of 0.5 percentage points.

Following the release of solid quarterly results and reassuring financial predictions for investors, major U.S. retailers saw gains. Ross Stores, a discount retailer, experienced the largest gain among S&P 500 stocks, rising 9.9%. Foot Locker, a retailer of shoes, increased 8.7% after increasing its annual profit and revenue outlook.

In an indication of consumer confidence ahead of Christmas shopping, U.S. retail sales increased 1.3% in October. Major retailers claim that despite the high rate of inflation, Americans continue to hold out for discounts and refuse to pay full price.

Financial and healthcare equities both increased. Charles Schwab gained 2.5%, while UnitedHealth Group increased by 2.9%.

Companies in the energy and communications sectors fell. In the midst of a general decline in energy prices, Marathon Oil dropped 1.6%. American crude oil finished 1.9% lower. Live Nation, a venue manager and entertainment promoter, fell 7.8%.

On the New York Mercantile Exchange’s electronic trading platform, benchmark U.S. crude lost 74 cents to trade at $79.37 per barrel in the energy sector. On Friday, the contract decreased $1.56 to $80.08. The benchmark price for international oil trade, Brent crude, dropped 90 cents to $86.72 per barrel in London. In the previous session, it fell $2.16 to reach $87.62.

The dollar increased from Friday’s 140.36 yen to today’s 140.42 yen. From $1.0331 to $1.0295, the euro decreased.

Miniechat

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