World News | Asian Shares Decline Following Wall Street Tumble
Get latest articles and stories on World at LatestLY. Asian shares declined Wednesday after stocks tumbled on Wall Street as worries persist about higher interest rates and their tightening squeeze on the global economy.
Tokyo, Feb 22 (AP) Asian shares declined Wednesday after stocks tumbled on Wall Street as worries persist about higher interest rates and their tightening squeeze on the global economy.
Tokyo's benchmark Nikkei 225 dipped 1.4 per cent in morning trading to 27,100.51. Australia's S&P/ASX 200 slipped 0.3 per cent to 7,312.50. South Korea's Kospi dropped 1.6 per cent to 2,420.93. Hong Kong's Hang Seng slipped 0.1 per cent to 20,500.35, while the Shanghai Composite shed 0.1 per cent to 3,302.23.
New Zealand's central bank raised its benchmark interest rate by a half-point to 4.75 per cent to try to wrestle down inflation. The increase, which can raise the borrowing costs for consumers on everything from credit cards to mortgages, comes despite widespread economic pain from a devastating cyclone.
Higher rates hurt investment prices and raise the risk of a recession by slowing business investment and consumer spending.
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US employment and consumer spending have weathered higher interest rates well, but a report Tuesday showed sales of previously occupied homes slowed to their slowest pace in more than a decade. The mixed signals leave investors wondering if the Fed will ease back on rate hikes or resume a more aggressive stance.
“Amid the evolving new narrative of stronger US growth, payrolls, retail sales, and the additional Fed response required to tame the rude health of the US economy, investors are beginning to think the hawkish Fed may not have entirely run its course yet," Stephen Innes of SPI Asset Management said in a commentary.
The S&P 500 fell 2 per cent to 3,997.34 on Tuesday for its sharpest drop since the market was selling off in December. The Dow Jones Industrial Average lost 697 points, or 2.1 per cent, to 33,129.59 while the Nasdaq composite sank 2.5 per cent to 11,492.30.
Home Depot fell to one of the market's larger losses after giving financial forecasts that fell short of Wall Street's expectations. It dropped 7.1 per cent despite reporting stronger profit for the last three months of 2022 than expected.
The retailer said it would spend USD 1 billion to increase wages for hourly US and Canadian workers. That fed into broader worries for markets that rising costs for companies have been eating into profits, which are one of the main levers that set stock prices.
Rates and stock prices are high enough that strategists at Morgan Stanley say US stocks look to be more expensive than at any time since 2007. (AP)
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