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

Inflation is anticipated to have an impact on fuel demand, which is contributing to a decline in the price of oil.

On Tuesday, oil prices declined, erasing some of the gains made in the previous trading session. This was due to market participants' concerns that more aggressive interest rate hikes from central banks could result in a worldwide economic slowdown and a reduction in the demand for fuel. After gaining 4.1% on Monday, the largest gain in more than a month, Brent crude futures LCOc1 for October settlement dropped 81 cents, or 0.7%, to $104.28 a barrel as of 03:59 GMT on Tuesday. This coming Wednesday marks the end of the October contract, while the more active November contract was trading at $102.33, a decrease of 0.6%. Following a surge of 4.2% in the previous session, the price of U.S. West Texas Intermediate crude CLc1 was reported to be $96.68 per barrel, a decrease of 33 cents, or 0.3%. Inflation is close to reaching double digits in many of the world's largest economies, a level that has not been seen in almost half a century. This could prompt central banks in the United ...

Discovering the World's Most Exquisite Natural Sceneries

In our pursuit of uncovering Earth's most mesmerizing natural landscapes, we've embarked on a global journey, seeking out unspoiled and awe-inspiring wonders of nature. The following expedition will guide you through an enchanting tour of the world's most stunning natural sceneries, each more captivating than the last. From luxuriant forests to dramatic cliffs and tranquil beaches, this serves as the ultimate handbook for immersing yourself in the beauty of nature. If you've ever wondered how to save money for a vacation while exploring the Most Beautiful Natural Landscapes, we've got you covered with practical tips and guidance to turn your dream vacation into a reality. The Enthralling Beauty of the Amazon Rainforest The Amazon Rainforest, often dubbed as the "Lungs of the Earth," stands as an unparalleled natural marvel. Spanning across South America, this lush and vibrant forest is home to an astounding variety of wildlife and plant species. The sheer ...

Google Gets In On Ethereum Merge Excitement With Nifty Easter Egg

The new feature has been added with just days left until the long-awaited Ethereum Merge. As a sign of support for the upcoming Ethereum Merge, tech juggernaut Google is marking the time left until the upgrade with a new countdown timer. Typing any variation of “Ethereum Merge” or “The Merge” into the search engine shows a countdown ticker, with the estimated time left until the Merge based on the current difficulty, hash rate and merge difficulty. Off to the side is a cartoon of two happy pandas running toward each other with outstretched hands, which supposedly will get closer as the Merge date draws nearer. In a Friday tweet, Google Cloud developer Sam Padilla said that the timer was “a fun little surprise” and a way to show their appreciation of “the work that has been going into this for years.” He said the work was done by Google’s search and labs team but noted that he helped “ kickstart ” the idea and discussion that led to the timer being implemented. In the same ...

EconomyDiary

Search This Blog