Asian shares sharply lower after wobbly day on Wall Street




  • In US
  • 2022-09-28 06:10:08Z
  • By Associated Press

TOKYO (AP) - Asian shares tumbled Wednesday after a wobbly day ended with mixed results on Wall Street as markets churn over the prospect of a possible recession.

Tokyo's Nikkei 225 index sank 2.1% to 26,020.56 while the Kospi in Seoul lost 2.8% to 2,161.95. In Sydney, the S&P/ASX 200 gave up 0.8% to 6,442.40.

Hong Kong's Hang Seng dropped 2.8% to 17,363.08 and the Shanghai Composite index declined 1.3% to 3,053.79. Taiwan's benchmark dropped 2.6%.

The week started off with a broad sell-off that sent the Dow Jones Industrial Average into a bear market, joining other major U.S. indexes.

On Tuesday, the S&P 500 slipped 0.2% to 3,647.29, its sixth consecutive loss. The Dow fell 0.4% to 29,134.99, while the Nasdaq composite wound up with a 0.2% gain, closing at 10,829.50.

Small company stocks held up better than the broader market. The Russell 2000 added 0.4%, to close at 1,662.51.

Major indexes remain in an extended slump. With just a few days left in September, stocks are heading for another losing month as markets fear that the higher interest rates being used to fight inflation could knock the economy into a recession.

The S&P 500 is down roughly 8% in September and has been in a bear market since June, when it had fallen more than 20% below its all-time high set on Jan. 4. The Dow's drop on Monday put it in the same company as the benchmark index and the tech-heavy Nasdaq.

Central banks around the world have been raising interest rates in an effort to make borrowing more expensive and cool the hottest inflation in decades. The Federal Reserve has been particularly aggressive and raised its benchmark rate, which affects many consumer and business loans, again last week. It now sits at a range of 3% to 3.25%. It was at virtually zero at the start of the year.

The Fed also has released a forecast suggesting its benchmark rate could be 4.4% by the year's end, a full percentage point higher than it envisioned in June.

Wall Street is worried that the Fed will hit the brakes too hard on an already slowing economy and veer it into a recession. The higher interest rates have been weighing on stocks, especially pricier technology companies, which tend to look less attractive to investors as rates rise.

Investors will be watching the next round of corporate earnings very closely to get a better sense of how companies are dealing with inflation. Companies will begin reporting their latest quarterly results in early October.

Consumer confidence remains strong, despite higher prices on everything from food to clothing. The latest consumer confidence report for September from The Conference Board showed that confidence was stronger than economists expected.

The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on second-quarter gross domestic product. On Friday, the government will release another report on personal income and spending that will help provide more details on where and how inflation is hurting consumer spending.

In other trading Wednesday, U.S. benchmark crude lost $1.28 to $77.23 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, used to price international oils, shed $1.27 to $83.60 per barrel in London.

The dollar fell to 144.73 Japanese yen from 144.81 yen. The euro was at 95.55 cents, down from 95.92 cents.

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