Following The Historic Fed Rate Rise, Hong Kong Stocks Fell To An 11-Year Low

Hong Kong stocks sank to their lowest level in more than a decade on Thursday, as did other Asian markets, after the US Federal Reserve hiked interest rates by 75 basis points and anticipated further rises, fanning fears of a recession.

The Hang Seng Index (HSI) plummeted 2.6%, breaking below 18,000 points before rebounding somewhat. It closed 1.6% down at 18,148, its lo

west level since December 2011.

The S&P/ASX 200 index in Australia sank 1.6%, while Japan's Nikkei 225 (N225) and South Korea's Kospi also declined 0.6%. The Shanghai Composite Index (SHCOMP) in China fell 0.3%.

European stocks dipped in early trade as well. The FTSE 100 (UKX) index in London fell approximately 0.3%, while the DAX (DAX) in Germany and the CAC40 (CAC40) in France both down about 0.7%. Stock futures in the United States were slightly moved.

The drops occurred after the Federal Reserve authorized a third straight 75-basis-point boost on Wednesday in an aggressive bid to combat the US economy's white-hot inflation.

The massive increase, which seemed incomprehensible to markets only a few months ago, raises the US Federal Reserve's benchmark lending rate to a new target range of 3%-3.25%. This is the greatest level since the 2008 global financial crisis.

"If you compare this rate rise cycle to past rate hike cycles dating back to 1983, the Fed has never hiked rates this much in such a short period of time," said David Chao, global market strategist, Asia Pacific (ex-Japan), at Invesco.

"With the Fed's 'forceful and quick' rate rises, it is becoming increasingly difficult for the US to escape recession," he continued.

Hong Kong's currency is pegged to the US dollar, and the city's central bank boosted its base rate by 75 basis points on Thursday to preserve that linkage.

Meanwhile, the Bank of Japan maintained its strategy of trying to boost the economy by keeping short-term interest rates at minus 0.1% on Thursday.

🔷Keep Pushing Your Profitable Trading With🔷

🔷AssetsFX🔷

The Japanese yen originally plummeted to 145 per US dollar, a new 24-year low, before swiftly reversing on claims of government intervention in the currency market.

A number of other concerns, notably escalating US-China tensions over Taiwan, harmed investor sentiment in the area.

On Tuesday, US Navy and Canadian warships transited the Taiwan Strait, barely two days after President Joe Biden warned the US military would defend Taiwan if China launched an assault of the democratically self-ruled island.

"The geopolitical background, the China slowdown narrative, the possibility for European energy rationing, the strong dollar, and fragile-looking domestic [US] equities and housing markets all point to clear recession risks," ING analysts said in a report on Thursday.

"A more aggressive Federal Reserve rate rise profile and tighter monetary conditions will further exacerbate the threat," they warned.

Comments

The Dollar Rises to a New 5-Week High Ahead of Jackson Hole on the Fed's Hawkish Tack

After another Federal Reserve member signaled the probability of sustained aggressive monetary tightening on Monday, the U.S. dollar index jumped to a new five-week high before the Fed's critical Jackson Hole symposium this week. After Russia said that it might cut off European gas supplies through the Nord Stream 1 pipeline for three days at the end of this month, worsening the region's energy crisis, the euro dropped to its lowest level in five weeks. The Chinese central bank slashed key lending rates, the latest in a series of monetary easing measures meant to shore up an economy suffering from COVID-19 crackdowns and a property crisis, which caused the yuan to fall to its lowest level in over two years. Last up 0.074% at 108.23, the U.S. dollar index rose to 108.26 for the first time since July 15 versus a basket of six rival currencies that includes the euro. This comes after a week in which the market rose 2.33 percent, its largest weekly rise since April 2020 and against...

A Bitcoin charity event has been announced by Hal Finney's wife.

She stated that the purpose of the event is to raise money in order to provide assistance to people who have been affected by ALS. Fran Finney, the wife of the pioneer in the field of cryptography Hal Finney, has announced a charitable event that will benefit patients suffering from amyotrophic lateral sclerosis (ALS). Finney, who was discussing the event on Twitter, urged users of Bitcoin to participate in a half marathon and share their experiences on social media between January 1 and January 10, 2023 in order to contribute to the fundraising effort to combat the disease. Fran Finney, using her husband Hal Finney's official Twitter account, was the one who made the announcement. She had previously reactivated the account in order to save it from being deleted during a purge that Twitter performs on inactive accounts. The event, which is being held in conjunction with the Golden West Chapter of the ALS Association, was given the moniker "Running Bitcoin" in honor of the...

Traders should approach their activity as a business.

Traders need the same self-control as any other successful entrepreneur. The very first thing you need to do is create a trading plan on paper. You should keep your own records so that you may evaluate your broker's statements independently. A straightforward Excel tally sheet detailing daily, weekly, and monthly totals would do the trick. Include gross profit/loss, a number of trades, commission expenses, ECN fees, other costs, net profit/loss, equity (verify that it matches brokerage reports), and any pertinent data. Use this data to your advantage and become a better trader. Look for trends and the connection between revenue and expenditures. Included in your trading plan should be a breakdown of the many trades you intend to make during the day or week. Traders that are likely to succeed do not just look at their charts and make a move. Before moving forward with an attack, they considered every possible outcome and made preparations accordingly. The first and most crucial step...

EconomyDiary

Search This Blog