Following the rise in interest rates in the UK and Switzerland, Asian stocks fell on Wall Street, raising concerns that tighter central bank monetary policy could undermine the global economic recovery.
Japan’s Topix Index and Australia’s S&P / ASX 200 fell 2 percent and South Korea’s Kospi fell 1.7 percent. China’s CSI 300 reversed the trend, but rose 0.7 percent.
Asian markets fell after the S&P 500 fell more than 3 percent, the U.S. stock benchmark fell 6 percent this week, and the technology-driven Nasdaq Composite fell more than 4 percent.
Despite a historic 0.75 percentage point rise in interest rates from the US Federal Reserve on Wednesday, shares were initially lifted by comments from Fed chairman Jay Powell, suggesting steps of this magnitude will not become the norm.
But the Swiss central bank on Thursday surprised markets by raising interest rates for the first time since the global financial crisis in 2007, when inflation in Switzerland reached a 14-year high last month. The Bank of England has since raised interest rates, warning that UK inflation will exceed 11 per cent this year.
“Global money is rising, and it’s still needed,” said Robert Carnell, head of ING’s Asia-Pacific research. “Equity futures show a jump as the weekend approaches. But it should probably be treated with a pinch of salt.
Equity futures showed the S&P 500 index rose 0.5 percent when Wall Street opened later today and the FTSE 100 was due to open.
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