Asian Markets Track Debt Falls On Wall Street, Rates Concerned

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Hong Kong (AFP)

Asian markets sagged on Friday as investors watched another major sell-off on Wall Street, worried about higher borrowing costs, a possible US debt default and signs of a slowing global economic recovery.

Although the fourth quarter is generally considered a strong period for traders, it started out much the same way the previous one ended, with uncertainty displaced by optimism that the worst of the pandemic is over.

News that US lawmakers have finally passed legislation to prevent costly government shutdowns did little to allay fears that they could not negotiate a deal to increase the debt limit.

Senior officials, including Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell, warned that otherwise, before the money runs out in mid-October, the country will be unable to pay bills and default, leading to economic disaster.

At the same time, Democrats continue to argue among themselves over Joe Biden’s multimillion-dollar infrastructure and social bills that will continue to flow through Congress.

Investors are also gearing up for the Fed to begin cutting back on its massive bond buying program by the end of the year.

The move will end the massive financial support provided at the start of the pandemic, which was a key factor in global economic recovery and justice. Observers suggest that interest rate hikes could occur before the end of 2023.

The bank’s tightening of monetary policy – which is mirrored in other economies – is happening because it is trying to contain the spike in inflation fueled by global resumptions, supply chain bottlenecks and rising commodity prices.

All three major Wall Street indices closed in the red on Thursday, with the S&P falling more than four percent in September.

And Asia followed suit.

Tokyo fell two percent as investors brushed off closely monitored Tankan business research showing confidence in major Japanese manufacturers improved for a fifth straight quarter.

Sydney, Seoul, Singapore, Wellington, Taipei and Jakarta also fell.

Markets in Hong Kong and mainland China were closed for the holiday.

China has been closely watched as troubled real estate titan Evergrande teeters on the brink of more than $ 300 billion in debt in the hopes that authorities – which have so far remained largely silent about the crisis – can comment on this during their week-long vacation.

Beijing’s crackdown on a number of industries, including tech companies, also continued to irritate the nerves.

“The old adage that the market is climbing a wall of worry has not been forgotten for us,” said Tom Mantion of UBS Private Wealth Management.

“Concerns about China, the pandemic, the debt ceiling and (US) tax laws are weighing on investors right now, but it is important to understand which challenges could lead to structural change and which short-term volatility that investors can take advantage of. … “

– Key numbers around 02:30 GMT –

Tokyo – Nikkei 225: DECREASE 2.0% to 28,861.83 (Gap)

Hong Kong – Hang Seng Index: closed for holiday

Shanghai – Composite: closed for weekends.

Dollar / yen: up 111.30 yen from 111.24 yen in 2035 GMT

Euro / dollar: $ 1.1573 DOWN from $ 1.1575.

Pound / dollar: DOWN $ 1.3457 from $ 1.3471.

Euro / lb: up 86 pence from 85.91 pence

West Texas Intermediate: DECREASE 0.2 percent to $ 74.90 a barrel.

Brent North Sea Crude: DECREASE 0.2 percent to $ 78.16 a barrel

New York – Dow: DECREASE 1.6% to 33,843.92 (close)

London – FTSE 100: down 0.3% to 7,086.42 (close)

– Bloomberg News contributed to this story –

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