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Stock markets: Asian shares follow Wall St lower after Fed rate signal

BEIJING –

Asian stock markets followed Wall Street lower on Thursday after investors viewed minutes from the Federal Reserve meeting as a sign the US central bank could raise interest rates faster to lower interest rates. inflation heat.

Shanghai, Tokyo, Hong Kong and Sydney withdrew. Oil prices fell.

On Wednesday, Wall Street’s benchmark S&P 500 posted its biggest daily drop in four months.

Notes released on Thursday from the Fed’s meeting last month showed that policymakers believe the US job market is nearly healthy enough to no longer need ultra-low interest rates. Traders took it as a sign that the Fed is likely to be more aggressive in backing away from the stimulus measures that are boosting stock prices.

Mizuho Bank’s Vishnu Varathan said in a report that it “destroyed the market” by upsetting expectations that the Fed’s previous plans were locked in.

The Shanghai Composite Index fell 0.2% to 3,587.19 and the Nikkei 225 in Tokyo fell 2.7% to 28,553.02. The Hang Seng Index in Hong Kong lost 0.6% to 22,779.58.

Kospi in Seoul fell 0.8% to 2,928.78 and Sydney’s S&P-ASX 200 fell 2.7% to 7,358.30.

India’s Sensex opened down 1.4% to 59,355.63. New Zealand, Bangkok and Jakarta fell while Singapore rose.

The Fed indicated in mid-December that stimulus cuts would be accelerated after US consumer inflation hit a 39-year high.

That has wowed investors, who have been encouraged by stronger corporate profits and the spread of coronavirus vaccinations. Even so, the S&P 500 ended 2021 with a 26.9% annual gain.

On Wall Street, the S&P 500 index fell 1.9% on Wednesday to 4,700.58.

The Dow Jones Industrial Average fell 1.1% to 36,407.11, pulling back to the previous day’s record. The Nasdaq composite fell 3.3% to 15,100.17 in its biggest single-day drop in 11 months.

Bond yields, or the difference between the day’s market price and payment at maturity, widened after the Fed’s notes were released.

Yields on 10-year Treasuries, a benchmark for setting interest rates on mortgages and other loans, rose to 1.70% from 1.68%.

The Fed minutes showed policymakers expressed concern that inflation was spreading into more sectors of the economy and would last longer than expected. They discussed the need to be able to raise short-term interest rates at a faster rate and allow bond purchases to pump money into the financial system to fall sooner.

Four out of five stocks in the S&P 500 fell. Tech companies are the biggest drag on the market. Microsoft fell 3.8% and software maker Adobe fell 7.1%.

In the energy market, benchmark US crude lost $1.09 to $76.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to $77.85 on Wednesday. Brent crude, the base price for international oils, fell $1.15 to $79.65 a barrel in London. It rallied 80 cents in the previous session to $80.80.

The dollar fell to 115.87 yen from 116.16 yen on Wednesday. The euro was little changed at $1.1312.

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