Nikkei tumbles, Asian market leader in decline – .

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Nikkei tumbles, Asian market leader in decline – .


BANGKOK – Asian markets slipped on Monday, with Japan’s Nikkei 225 index down 4%, after a Friday sell-off on Wall Street gave the S&P 500 its worst weekly loss since February.

Le Nikkei NIK,
-3,55%
abandoned more than 1,100 points and the Kospi 180721,
-0,87%
in Seoul lost 1.2% and the Hang Seng HSI index in Hong Kong,
-1,36 %
was down 1.4%. the Australian S & P / ASX 200 XJO,
-1,61 %
fell by 1.8% and the Shanghai Composite SHCOMP index,
-0.11%
fell 0.2%. Shares fell in Singapore STI,
-1,39 %,
Taiwan Y9999,
-1,39 %
and Indonesia JAKIDX,
-0,72 %.

Investors are still recalibrating their moves after the Federal Reserve signaled last week that it may raise current ultra-low rates sooner than expected. This gave the Dow Jones Industrial Average its worst weekly loss since last October.

Part of the Fed’s mission is to keep prices under control. The fear is that flare-up inflation could prompt central banks to cut back the lavish support that took markets to new highs after falling at the start of the coronavirus pandemic last year.

Until its last policy meeting last week, the Fed said it viewed recent price hikes as transient and would let the economy recover. He now plans to hike interest rates twice in 2023.

“The move to an earlier timeline for a rate hike, accompanied by an upward revision of core inflation expectations to 3%, seems to suggest that the Fed may still be concerned about inflationary pressures to some extent. measure from its previous position to let inflation run wild, ”IG’s Yeap Jun Rong said in a comment.

South Korea reported that its exports had increased by nearly 30% in the first 20 days of June, the latest indication that the region’s recovery is continuing despite persistent outbreaks of infections in many places.

Vendredi, le S&P 500 SPX,
-1,31 %
fell 1.3% to 4,166.45 in a large pullback, while the Dow Jones Industrial Average DJIA,
-1,58%
lost 1.6% to 33,290.08. The Nasdaq composite COMP,
-0,92 %
fell 0.9% to 14,030.38.

The Fed has also started talks about slowing down its $ 120 billion monthly bond purchases, which helps keep mortgages and other long-term borrowing cheap. But the Fed chairman said such a reduction was probably still a long way off.

Markets were spooked after St. Louis Federal Reserve Chairman James Bullard told CNBC on Friday that his personal prediction was that the first rate hike could come as early as next year.

It’s recognition that a recovering economy with near record prices for homes and stocks may not need very low rates any longer. A recent surge in inflation could also increase the pressure. But any pullback in Fed support would be a big change for markets, which have been feasting on ultra-low rates for over a year.

The Dow Jones lost 3.5% last week. The Nasdaq composite, which has more high-growth tech stocks, fell a much more modest 0.3%.

Still, major U.S. stock indexes remain relatively close to their all-time highs as the economy continues to emerge from the recession caused by the pandemic. The S&P 500 is only about 2% below its all-time high on Monday, and the Dow Jones is within 5% of its all-time high last month.

A measure of stock market nervousness, known as the VIX, rose on Friday, but only returned to its level of about a month ago.

The 10-year Treasury yield eased to 1.40% Monday from 1.43% Friday night.

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