BANGKOK (AP) – Global stocks fell on Friday after tech companies lowered Wall Street benchmarks as investors weighed the implications of rising interest rates, increasing cases of coronavirus and tensions between Beijing and Washington.
Benchmarks fell in Paris, London, Frankfurt and Tokyo but rose in Shanghai.
U.S. stocks fell a day after the Federal Reserve said it was preparing to hike rates next year to fight inflation, and traders were also considering action by other central banks.
The Bank of Japan said on Friday it would cut some of its pandemic support measures, reducing corporate bond purchases to pre-crisis levels after March. It also extended additional support for loans to small businesses by six months. But his board meeting also kept ultra-relaxed monetary policy largely unchanged.
“The Japanese economy has picked up as a trend, although it has remained in dire straits due to the impact of COVID-19 at home and abroad,” he said in a statement. He noted the lingering risks associated with the pandemic and supply chain disruptions.
Thursday the bank of england became the first central bank among the major economies to raise interest rates to fight inflation. the European Central Bank still plans to reduce his pandemic stimulus, but not abruptly.
The move by the central bank of Japan was “dovish striking” compared to other moves by the central bank, said Marcel Thieliant of Capital Economics in a comment.
He noted that unlike other large economies, inflation is not a big concern. For years, the BOJ has tried unsuccessfully to achieve an inflation target of 2%.
“The result is that the Bank of Japan will remain among the few central banks not to tighten policy for the foreseeable future,” Thieliant said.
The German DAX lost 0.8% to 15,513.92 and the CAC 40 in Paris lost 0.7% to 6,953.55. The UK FTSE 100 lost less than 0.1% to 7,258.03. The future of the S&P 500 was down 0.2%, while the contract for Dow industrials was almost unchanged.
In Asian trade, the Tokyo Nikkei 225 index fell 1.8% to 28,545.68, while Seoul’s Kospi recovered from previous losses to gain 0.4%, to 3,017.73 . In Australia, the S & P / ASX 200 was up 0.1% to 7,304.00.
Hong Kong’s Hang Seng lost 1.2% to 23,192.63. The Shanghai Composite index lost 1.2% to 3,632.36. Tensions between the United States and China were in the spotlight after the United States Congress approved legislation banning all imports from China’s Xinjiang region unless companies can prove that they were produced without forced labor.
It was the latest move to tighten US sanctions against China’s alleged abuses against ethnic and religious minorities in the western region, especially the millions of predominantly Muslim Uyghurs in Xinjiang. The Commerce Department has also imposed new sanctions on the Chinese Academy of Military Medical Sciences and its 11 research institutes that focus on using biotechnology to support the Chinese military.
Concerns over real estate developers caught off guard in a campaign to cut rising debt levels have also weighed on Chinese stocks. Shares of Shimao Group Holding fell 4.9% on Friday after Fitch Ratings downgraded them to BB from BBB minus.
The deterioration is due to the weak conditions of sale and financing which have become unfavorable due to the cash position of the company, he said.
Thursday’s Wall Street liquidation lowered the S&P 500 0.9% to 4,668.67, wiping out about half of its gains from the previous day. The Nasdaq slipped 2.5% to 15,180.43, its biggest drop since September. The Dow Jones Industrial Average slipped 0.1% to 35,897.64.
Several large tech companies have weighed in on the market. Apple slipped 3.9% and Microsoft fell 2.9%.
The Russell 2000 Small Cap Index was down 2% to 2,152.46. All major indices are on the verge of posting weekly losses.
The sell-off followed a rally the day before when the Fed announced plans to step up its reduction in monthly bond purchases, which helped keep interest rates low. The policy change paves the way for the Fed to start raising rates next year.
As interest rates are set to rise, investors are rethinking the high valuations they have assigned to tech giants.
The growing number of omicron variant coronavirus infections is also cast a shadow as public health experts have started demanding greater precautions and warning of a worsening wave of COVID-19 outbreaks.
The 10-year Treasury yield fell to 1.42% from 1.43% Thursday night.
In other trading on Friday, US crude oil fell 85 cents to $ 71.53 a barrel in electronic trading on the New York Mercantile Exchange. He earned $ 1.31 to $ 72.38 on Thursday. Brent crude, the basis of international crude pricing, fell 89 cents to $ 74.13 a barrel.
The US dollar weakened to 113.56 Japanese yen from 113.69 yen. The euro was unchanged at $ 1.1330.
Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.