Shanghai will lock down a district in the south west as cases rise again
Recession and inflation concerns pushed Wall Street stocks lower overnight, with updates from major companies adding to a cautious tone among investors. The Dow Jones Industrial Average gave up 0.81%, the S&P 500 slid 1.08%, while Nasdaq Composite dropped 0.73%. In individual stocks, shares of Credit Suisse shed 2.76% after the bank revealed a profit warning for the second quarter, citing tighter monetary policy. Similarly, Intel fell 5.28% after the company warned of lower demand for semiconductors.
Asian equity markets were mostly under pressure on Thursday, further weighed by persistent uncertainty over the economic outlook. China’s Shanghai Composite was down 0.76% on the news that Shanghai will lock down a district in the south west to conduct a mass Covid-19 testing drive. On the positive side, Japan’s Nikkei 225 finished just above the flat-line, while the yen extended losses to fresh twenty-year lows versus the dollar before turning positive on the day.
In Europe, stocks opened lower as investors were nervous ahead of the ECB meeting outcome due later today. The central bank is set to announce an imminent end to large-scale asset purchases to curb persistently high inflation. The Stoxx Europe 600 fell 0.9% in early deals, with US stock index futures implying a negative open on Wall Street later in the day.
The dollar holds steady above 102.50 on Thursday, supported by a risk-off tone that dominates global financial markets ahead of major events. EURUSD failed to overcome the 1.0750 intermediate barrier yesterday to come under renewed selling pressure. The shared currency was last seen flirting with the 1.0700 handle, followed by the 1.0670-1.0650 support zone. Should the ECB disappoint by a more cautious tone, the pair could see solid losses in the near term.