Lending markets

Asian markets are mostly down, echoing lower US rate concerns

TOKYO — Asian stocks were mostly down on Monday, reflecting pessimism over weakness on Wall Street as pressure from central banks around the world to rein in inflation weighs on investor sentiment.

The Japanese reference Nikkei 225 NIK,
-2.64%
fell 2% in morning trading. Australian S&P/ASX 200 XJO,
-1.29%
fell 1.6% and South Korea’s Kospi 180721,
-2.84%
fell 2.4%. Hang Seng HSI from Hong Kong,
-0.28%
was roughly flat, just like the Shanghai Composite SHCOMP,
-0.14%.
Benchmarks in Singapore STI,
-1.14%,
Taiwan Y9999,
-2.52%
and Indonesia JAKIDX,
-1.22%
decreases.

“Momentum could come from the further sell-off on Wall Street that will end last week, with US dollar strength weighing on Asian indices,” Yeap Jun Rong, market strategist at IG in Singapore, said in a statement.

Recent moves by the US Federal Reserve and other central banks around the world to raise interest rates aim to curb high inflation, but they also threaten a recession if rates rise too much or too quickly.

Wall Street ended last week with widespread selling, leaving the major indexes with their fifth loss in six weeks. Data on European business activity was disheartening, and a separate report suggested that activity in the United States is also continuing to contract, although not as badly as in previous months.

The S&P 500 SPX,
-1.72%
fell 1.7% on Friday, to 3,693.23, its fourth consecutive decline. The Dow DJIA,
-1.62%,
which at one point was down more than 800 points, lost 486.27 points, or 1.6%, to close at 29,590.41. The Nasdaq COMP,
-1.80%
fell 1.8% to 10,867.93.

More than 85% of S&P 500 stocks closed in the red, with technology companies, retailers and banks among the largest weightings in the benchmark.

Last week, the Fed raised its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It was close to zero at the start of the year. The Fed also released a forecast suggesting that its benchmark rate could be 4.4% by the end of the year, one point higher than expected in June.

In energy trading on Monday, US benchmark crude CLX22,
-0.60%
rose 12 cents to $78.86 a barrel in electronic trading on the New York Mercantile Exchange. U.S. crude oil prices fell 5.7% on Friday to their lowest levels since the start of this year on fears that a weaker global economy could consume less fuel.

Brent crude BRNX22,
-0.63%,
the international standard, edged up 6 cents to $86.21 a barrel.

In currency trading, the recent rise in the US dollar USDJPY,
+0.60%
has been a concern, stoking worries about declining profits for US companies with overseas operations and putting financial pressure on much of the developing world.

When the dollar approached 146 yen last week, the Bank of Japan stepped in. The dollar has been trading at around 143 yen since then.

It rose slightly on Monday to 143.75 Japanese yen from 143.32 yen.