Asian shares fall on inflation, recession concerns; oil skids

  • In Business
  • 2022-06-02 02:22:39Z
  • By Reuters

By Andrew Galbraith

SHANGHAI (Reuters) - Asian share markets fell on Thursday on widespread investor worries over high inflation and the threat of recession, while oil prices slumped following a report of reassurances from Saudi Arabia over production.

Global benchmark Brent crude was last down more than 2% a barrel at $113.86 ahead of a meeting of oil producing countries later in the day, which is expected to pave the way for output increases. [OIL/]

U.S. crude also dipped more than 2% to $112.55 per barrel.

The fall in oil prices gathered pace after the Financial Times reported that Saudi Arabia may be prepared to raise oil production in the event of a sharp drop in Russia's output.

"This will be well received by Western leaders given inflation - and inflation expectations - remain eye wateringly high, and central banks try to raise rates at the risk of tipping their economies into a recession," said Matt Simpson, senior market analyst at City Index in Sydney.

"More supply essentially soothes some of those inflationary fears, even if there is a lot more work to do when it comes to fighting inflation."

Investors' worries over inflation and recession have festered amid uncertainty caused by the U.S. Federal Reserve's pace of interest rate hikes, the impact of the Russia-Ukraine war on food and commodity prices, and supply chain constraints exacerbated by strict COVID-19 curbs in China.

On Wednesday, a survey showing stronger-than-expected U.S. manufacturing activity in May did little to assuage those concerns. Jamie Dimon, chairman and chief executive of JPMorgan Chase & Co, likened the challenges facing the U.S. economy to a "hurricane".

Rodrigo Catril, senior FX strategist at NAB, said details of the survey showed price signals "still consistent with extremely strong inflationary pressures" and negative employment growth in the manufacturing sector.

"The services sector is the big U.S. employer so it will be important to see what the Services ISM reveals on Friday," he said.

A new survey of South Korean factory activity on Thursday showed slowing growth in May as import and export orders shrank, the latest indicator of global manufacturing woes.

In morning trade, MSCI's broadest index of Asia-Pacific shares outside Japan was down 1%. China's blue-chip index fell 0.45%, Australian shares were down 0.90%, and Seoul's KOSPI was about 1% lower.

In Tokyo, the Nikkei slid 0.26%.

The Asian moves tracked weakness on Wall Street overnight, where the Dow Jones Industrial Average fell 0.54%, the S&P 500 lost 0.75% and the Nasdaq Composite dropped 0.72%.

While the stronger U.S. manufacturing data did little to lift U.S. shares, it supported the dollar. [FRX/]

In Asian trade, the global dollar index was steady at 102.56, while the yen firmed slightly to 130.05 per dollar as U.S. yields inched lower from to week highs, and the euro edged up 0.05% to $1.0651.

Benchmark U.S. 10-year Treasury notes last yielded 2.9149%, down from a U.S. close of 2.931% on Wednesday, while the two-year yield slipped to 2.6517% from a close of 2.664%.

The lower yields kept gold prices steady after hitting a two-week low on Wednesday. Spot gold was little changed at $1,845.08 per ounce. [GOL/]

(Editing by Jacqueline Wong)


More Related News

Branden Grace wins LIV Golf
Branden Grace wins LIV Golf's first tournament in United States

Branden Grace won LIV Golf's first stop on U.S. soil, an event that drew critics and protesters because of the upstart series' funding by Saudi Arabia.

Grace heats up late to win Portland LIV Golf Invitational
Grace heats up late to win Portland LIV Golf Invitational

Branden Grace grabbed five of his eight birdies on the back nine on Saturday to pull away for a two-shot win in the Portland LIV Golf Invitational and capture the $4 million first prize.

Paul Casey, a former UNICEF ambassador, is the latest player to join Saudi Arabia-backed LIV Golf
Paul Casey, a former UNICEF ambassador, is the latest player to join Saudi Arabia-backed LIV Golf

Casey was previously against playing in the Kingdom, but has teed it up in the Saudi International the last two years.

BofA Says Brace for Recession Shock After Worst Rout in 52 Years
BofA Says Brace for Recession Shock After Worst Rout in 52 Years

(Bloomberg) -- A "recession shock" begins for markets following the worst first-half for the S&P 500 in more than 50 years, Bank of America Corp.'s Chief...

Missing From Biden
Missing From Biden's Europe Trip: An Endgame for War and Cheaper Gasoline
  • World
  • 2022-06-30 18:34:50Z

MADRID - President Joe Biden issued a grim warning to Americans after Russian troops invaded Ukraine in February: Standing up to President Vladimir Putin...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


  • facebook解封
    (2022-06-28 20:53:46Z)



Top News: Business