AGL 38.15 Increased By ▲ 0.90 (2.42%)
AIRLINK 121.51 Decreased By ▼ -2.51 (-2.02%)
BOP 5.85 Increased By ▲ 0.23 (4.09%)
CNERGY 3.75 Increased By ▲ 0.03 (0.81%)
DCL 8.40 Increased By ▲ 0.15 (1.82%)
DFML 40.89 Increased By ▲ 0.62 (1.54%)
DGKC 84.60 Decreased By ▼ -1.14 (-1.33%)
FCCL 32.70 Increased By ▲ 0.10 (0.31%)
FFBL 65.50 Decreased By ▼ -1.00 (-1.5%)
FFL 10.05 Decreased By ▼ -0.11 (-1.08%)
HUBC 103.80 Increased By ▲ 0.70 (0.68%)
HUMNL 13.25 Decreased By ▼ -0.15 (-1.12%)
KEL 4.43 Increased By ▲ 0.18 (4.24%)
KOSM 7.09 Decreased By ▼ -0.09 (-1.25%)
MLCF 37.50 Decreased By ▼ -0.80 (-2.09%)
NBP 60.25 Decreased By ▼ -4.76 (-7.32%)
OGDC 172.25 Decreased By ▼ -1.55 (-0.89%)
PAEL 24.80 Decreased By ▼ -0.10 (-0.4%)
PIBTL 5.70 Decreased By ▼ -0.10 (-1.72%)
PPL 141.69 Decreased By ▼ -1.01 (-0.71%)
PRL 22.72 Decreased By ▼ -0.26 (-1.13%)
PTC 14.74 Decreased By ▼ -0.37 (-2.45%)
SEARL 64.56 Decreased By ▼ -0.79 (-1.21%)
TELE 7.14 Increased By ▲ 0.14 (2%)
TOMCL 35.50 Decreased By ▼ -1.41 (-3.82%)
TPLP 7.29 Decreased By ▼ -0.05 (-0.68%)
TREET 14.20 Decreased By ▼ -0.08 (-0.56%)
TRG 51.75 Increased By ▲ 2.05 (4.12%)
UNITY 26.60 Increased By ▲ 0.45 (1.72%)
WTL 1.22 Decreased By ▼ -0.02 (-1.61%)
BR100 9,483 Decreased By -118.3 (-1.23%)
BR30 28,371 Decreased By -202.1 (-0.71%)
KSE100 88,967 Decreased By -1319.8 (-1.46%)
KSE30 27,827 Decreased By -515.9 (-1.82%)

HONG KONG: Asian markets sank Wednesday as a mixed US inflation report did little to soothe investor worries that the Federal Reserve will continue to ramp up interest rates, which many fear could cause a recession.

The much-anticipated figures from January’s consumer price index showed a slight slowdown from the previous month, but the 6.4 percent reading was higher than forecast, suggesting a return to normality will take longer than hoped.

A number of top Fed officials also lined up to restate that borrowing costs will likely need to go higher and for an extended period if they are to bring inflation down to their two percent target.

Recent data had suggested the bank’s almost year-long rate-hike campaign was beginning to show results, providing fuel for a healthy run-up in global markets in January as traders began factoring in a possible cut towards the end of 2023.

But that optimism has taken a severe hit, with a blockbuster jobs report confirming that the world’s top economy remains robust, narrowing the scope for the Fed to ease up.

After the figures were released, monetary policymakers reiterated their determination to stay the course, with expectations that rates could go well above five percent, from the current 4.5-4.75 percent.

Dallas Fed president Lorie Logan said: “We must remain prepared to continue rate increases for a longer period than previously anticipated, if such a path is necessary to respond to changes in the economic outlook or to offset any undesired easing in conditions.”

However, Philadelphia Fed chief Patrick Harker said he thought the bank was “likely close” to being restrictive enough.

Asia stocks slip, dollar gains before US inflation test

Wall Street ended mixed, having fluctuated after the data release. But Asia sank back into the red.

Hong Kong led losses, shedding more than one percent, with China’s reopening from zero-Covid no longer able to provide any cushion to sentiment.

Shanghai, Tokyo, Singapore, Seoul, Sydney, Taipei, Wellington, Manila and Jakarta were also well down.

The prospect of more rate hikes lifted the dollar against its peers on Tuesday, and it held its gains in Asian trade.

“While in line, the CPI release is a reminder that lowering inflation towards the Fed’s target may be more gradual than conventional thinking,” said SPI Asset Management’s Stephen Innes.

“And this environment may also result in a higher-for-longer rate environment – somewhat counter to a market still pricing in a Fed funds rate cut later this year.”

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 0.4 percent at 27,491.51 (break)

Hong Kong - Hang Seng Index: DOWN 1.6 percent at 20,777.91

Shanghai - Composite: DOWN 0.4 percent at 3,280.33

Euro/dollar: DOWN at $1.0727 from $1.0739 on Tuesday

Dollar/yen: DOWN at 132.79 yen from 133.07 yen

Pound/dollar: DOWN at $1.2152 from $1.2176

West Texas Intermediate: DOWN 0.3 percent at $78.81 per barrel

Brent North Sea crude: DOWN 0.3 percent at $85.34 per barrel

New York - Dow: DOWN 0.5 percent at 34,089.27 (close)

London - FTSE 100: UP 0.1 percent at 7,953.85 (close)

Comments

Comments are closed.