Asian stocks down after US midterms turn global markets red

Asian stocks down after US midterms turn global markets red

Traders are concerned about the impact of US midterm election results on inflation
Traders are concerned about the impact of US midterm election results on inflation. Photo: SETH HERALD / AFP/File
Source: AFP

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!

Asian stocks started down on Thursday after inconclusive US midterm election results and a turbulent cryptocurrency market left Wall Street and European markets in a sea of red.

The uncertainty, especially about how the midterm results would impact inflation, transferred to Asia overnight.

Tokyo, Hong Kong, Shanghai, Seoul, Jakarta and Taipei were all trading lower.

"A purple dilemma might be the best way to describe the red-blue tangle that emerged Wednesday. It'll be gridlock, that's for sure," Stephen Innes of SPI Asset Management said of the US midterms.

"Perhaps not the friendliest kind for market participants, many of whom were hoping for a more resounding rebuke of Democrats given inflation realities."

All eyes are expected to turn to US inflation data, due later Thursday, to gauge the speed of future rate hikes by the Federal Reserve.

Read also

FTX collapse gives crypto sector 'another black eye'

PAY ATTENTION: Follow us on Instagram - get the most important news directly in your favourite app!

"US growth looks still too strong to bring inflation down," Tapas Strickland of National Australia Bank said in a note.

"The ongoing resilience in the (consumer prices) data and stickiness in inflation continue to point to the Fed hiking rates closer to 5.0 percent or higher."

Fed officials have raised their policy rate to a range of between 3.75 to 4.0 percent.

'Crypto tumult'

Markets in Asia were already grappling with the impact of strict zero-Covid measures in China, with supply chains and activity slowed by harsh lockdowns and testing policies.

"China's domestic demand is weak and their key trading partners are entering recession territory," said Edward Moya from Oanda.

"China is also continuing to struggle with COVID as Guangzhou has to return to mass testing."

The crypto world was also rocked by a surprise decision from Binance, the world's biggest cryptocurrency platform, to scrap a possible acquisition of rival FTX.com a day after disclosing it had signed a non-binding letter of intent to buy it.

Read also

Dark clouds over China's economy as zero-Covid, global slowdown bite

The near-collapse of FTX has plunged bitcoin to a two-year low.

"You can't deny the growing correlation between bitcoin and risk assets," said Innes.

"The FTX news is having an outsized effect on asset prices," he said, adding that "all ships were sinking on the crypto tumult."

Key figures around 0230 GMT

Tokyo - Nikkei 225: DOWN 1.16 percent at 27,395.71

Hong Kong - Hang Seng Index: DOWN 2.49 percent at 15,950.47

Shanghai - Composite: DOWN 0.39 percent at 3,036.37

Pound/dollar: UP at $1.1394 from $1.1352

Euro/dollar: FLAT at $1.0017

Dollar/yen: DOWN at 146.19 yen from 146.37 yen

Euro/pound: DOWN at 87.89 pence from 88.19 pence

West Texas Intermediate: DOWN 0.22 percent at $85.64 per barrel

Brent North Sea crude: DOWN 0.19 percent at $92.47 per barrel

New York - Dow: DOWN 2.0 percent at 32,513.94 (close)

London - FTSE 100: DOWN 0.1 percent at 7,296.25 (close)

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.