Shares in Asia continued to fall on Wall Street after the UK and Switzerland raised interest rates, adding to concerns that tougher central bank monetary policies could undermine global economic recovery.
Japan’s Topix benchmark and Australia’s S & P / ASX 200 fell 2%, while South Korea’s Kospi fell 1.7%. However, China’s CSI 300 outperformed the trend, rising 0.7%.
Falls in Asian markets came after the S&P 500 fell more than 3 percent, lowering the U.S. benchmark by 6 percent this week, while the technology-focused Nasdaq Composite fell more than 4 percent.
Despite the US Federal Reserve’s 0.75 percentage point rate hike on Wednesday, stocks were initially boosted by Fed Chairman Jay Powell’s comments that moves of this magnitude would not be reversed. in usual.
But the Swiss central bank shocked markets on Thursday with its first rate hike since the 2007 global financial crisis, after inflation in Switzerland hit a 14-year high last month. This was followed by a rate hike by the Bank of England, which warned that UK inflation would rise above 11 per cent this year.
“Global money is becoming more expensive and still has a long way to go,” said Robert Carnell, ING’s Asia-Pacific head of research. “Equity futures suggest a rebound as we head into the weekend. But that should probably be treated with a little salt.”
Equity futures were up 0.5 percent for the S&P 500 when Wall Street opened later today, while the FTSE 100 was expected to open unchanged.