Investors continue to weigh the potential impact of rate rises globally
On Thursday, US stocks failed to extend the ascent and suffered deep losses instead amid renewed recession concerns amid the central banks’ ongoing fight with inflation. The S&P 500 index fell by 3.25% to hit the lowest level since late-2020. The Nasdaq Composite plunged 4.08% while the Dow shed 2.4% to finish below the 30,000 figure for the first time since January 2021. In individual stocks, shares of Adobe finished 3.14% lower to lose as much as 5% in extended trading after the company gave full-year guidance that fell short of market expectations.
In Asia, equities followed Wall Street lower on Friday as investors continued to weigh the potential impact of rate rises globally. The UK and Switzerland raised interest rates yesterday, adding to concerns that tighter monetary policy could dent global economic growth. The Nikkei 225 in Tokyo fell 1.77%, the Kospi in Seoul retreated 0.43%, and Sydney’s S&P-ASX 200 tumbled 1.76%. Bucking the trend, the Shanghai Composite in China gained nearly 1% while Hong Kong’s Hang Seng added 1.15%.
European stock markets opened slightly higher ahead of the weekend, signaling some improvement in risk sentiment after a rout. Still, the regional indexes remain on course for hefty losses this week in the wake of a series of global central banks tightening monetary policies. In individual stocks, shares of Tesco fell 0.3% after the UK company said its sales stagnated in the second quarter. Later today, the May Eurozone consumer prices report expected to confirm growth of 0.8% on a monthly basis.
In currencies, the USD index turned positive on Friday after a two-day slide. The dollar is back above the 104.00 figure but struggles to reverse yesterday’s losses as risk aversion has abated somehow. EURUSD came off local peaks seen around 1.0600, oscillating around 1.0500 in early European deals. The shared currency remains vulnerable at this stage despite the recent bounce from the area of long-term lows registered earlier in the week.
