{"id":8669,"date":"2022-06-09T14:01:21","date_gmt":"2022-06-09T14:01:21","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=8669"},"modified":"2022-06-09T14:01:21","modified_gmt":"2022-06-09T14:01:21","slug":"asian-markets-drop-as-oil-rises-inflation-fears-ramp-up","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/asian-markets-drop-as-oil-rises-inflation-fears-ramp-up\/","title":{"rendered":"Asian markets drop as oil rises & inflation fears ramp up"},"content":{"rendered":"

ISLAMABAD: Asian markets fell Thursday as a rally in oil ramped up inflation fears, with top officials warning of more pain to come as the Ukraine war continues to push prices up and put further pressure on the global economy.<\/p>\n

Buyers on Wall Street were in retreat again after data showed US crude and gasoline stockpiles sank, just as the summer driving season begins and leading OPEC member demand would surge further as China reopens.<\/p>\n

Adding to the gloom was the OECD\u2019s sharp downward revision of its global growth outlook and doubling of its inflation forecast.<\/p>\n

The glum mood was only slightly offset by ongoing optimism that Beijing\u2019s tech crackdown was close to an end.<\/p>\n

Both main crude contracts jumped more than two percent Wednesday to three month highs after figures showed the biggest US storage depot had seen a big fall in reserves last week, suggesting elevated prices were not deterring people from driving.<\/p>\n

Meanwhile, White House Press Secretary Karine Jean-Pierre said officials expect Friday\u2019s keenly awaited consumer price index will be \u201celevated\u201d.<\/p>\n

The comment lifted expectations that the Federal Reserve will stick to its hawkish path and hike interest rates by half a point for at least three more meetings this year as it tries to bring down inflation from four-decade highs.<\/p>\n

Read more:\u00a0Maiden cabinet meeting: PM Shehbaz vows to address critical problems of inflation, employment<\/a><\/strong><\/em><\/p>\n

Analysts said investors were unlikely to get any reprieve until crude \u2014 a key driver of inflation since Russia\u2019s invasion of Ukraine \u2014 was brought under control.<\/p>\n

\u201cA pullback in crude would be crucial for any prolonged risk rally, given implications for inflation expectations,\u201d said SPI Asset Management\u2019s Stephen Innes.<\/p>\n

\u201cAnd for the central bank fraternity intent on frontloading rates, chapter two of the current playbook reads that aggressive tightening risks a material decline in housing, consumer confidence, and consumption that will eventually drive their respective economies into recession and send stocks tumbling.<\/p>\n

\u201cSo until we reach peak inflation, which will trigger a less hawkish Fed and lower recession odds, it could be a gloomy summer for global stock pickers.\u201d<\/p>\n

He added that prices were expected to rise further for now as China emerges from months of lockdown, a sentiment that United Arab Emirates Energy Minister Suhail Al-Mazrouei agreed with.<\/p>\n

\u201cWith the pace of consumption we have, we are nowhere near the peak because China is not back yet,\u201d he told a conference Wednesday. \u201cChina will come with more consumption.\u201d<\/p>\n

 <\/p>\n

The unease about rising prices and rates saw all three main indexes on Wall Street drop along with European markets, with focus on the European Central Bank\u2019s policy meeting later Thursday.<\/p>\n

The ECB is expected to begin winding down its massive bond-buying programme and signal a rate hike was in the pipeline.<\/p>\n

Asian traders followed suit Thursday.<\/p>\n

Hong Kong dropped, even as tech firms continued to benefit from hopes that China\u2019s crackdown was almost over, while Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Wellington were also in the red.<\/p>\n

Tokyo, however, edged up as the yen sat at two-decade lows owing to widening the monetary policies of the hawkish United States and Japan, which shows no signs of lifting rates.<\/p>\n

Investors were jarred by a report from the Organisation for Economic Co-operation and Development, which said it had cut its 2022 growth outlook to three percent \u2014 from 4.5 percent predicted in December \u2014 owing to the Ukraine war.<\/p>\n

It also doubled its inflation estimate to 8.5 percent, a 34-year high.<\/p>\n

\u201cThe world is set to pay a hefty price for Russia\u2019s war against Ukraine,\u201d wrote the OECD\u2019s chief economist and deputy secretary-general, Laurence Boone.<\/p>\n

And Anna Han, at Wells Fargo Securities, told Bloomberg Television: \u201cOur view is that the chance of recession by the end of 2023 is 40 percent or so.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

ISLAMABAD: Asian markets fell Thursday as a rally in oil ramped up inflation fears, with top officials warning of more pain to come as the Ukraine war continues to push prices up and put further pressure on the global economy. Buyers on Wall Street were in retreat again after data showed US crude and gasoline […]<\/p>\n","protected":false},"author":8,"featured_media":8670,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,3],"tags":[5939],"class_list":["post-8669","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-world","tag-asian-markets"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/8669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=8669"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/8669\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/8670"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=8669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=8669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=8669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}