Stocks fell across Asia on Wednesday morning, extending overnight losses on Wall Street amid concerns over the recession, inflation, and high oil prices, which also boosted the safe-haven dollar.
Japan’s Nikkei index fell 1.01 percent in early trading, while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1 percent, dragged lower by Australian shares, off 1.29 percent, and Korea’s KOSPI, down 1.57 percent.
Asian shares had ended the previous session on a positive trajectory after China announced an easing of its quarantine requirements for inbound passengers, in what some observes saw as the biggest relaxation so far of its “zero COVID” strategy. But the impact was petering out on Wednesday.
Businesses have been raising prices on everything from food to clothing. Russia’s invasion of Ukraine in February put even more pressure on consumers by raising energy prices and pumping gasoline prices to record highs.
Consumers already were shifting spending from goods to services as the economy recovered from the pandemic’s impact, but the intensified pressure from inflation has prompted a sharper shift away from discretionary items like electronics to necessities.
Central banks are raising rates to try and temper inflation after years of holding rates down to help economic growth but investors fear they could go too far and actually push economies into a recession.
Crude oil fell in volatile trading on Monday as the market grapples with concerns that a global economic slowdown could depress demand versus worries about lost Russian supply amid sanctions over the Ukraine conflict.
In Asian trade, the global dollar index was steady at 102.56, while the yen firmed slightly to 130.05 per dollar as US yields inched lower from week highs, and the euro edged up 0.05 percent to $1.06.
Benchmark US 10-year Treasury notes last yielded 2.91 percent, down from a US close of 2.93 percent on Wednesday, while the two-year yield slipped to 2.65 percent from a close of 2.66 percent.
The lower yields kept gold prices steady after hitting a two-week low on Wednesday. Spot gold was little changed at $1,845.08 per ounce.
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