Asian stocks on Friday sank again after German inflation spiked higher, British Prime Minister Liz Truss defended a tax-cut plan that rattled investors and Chinese factory activity weakened.
Taipei, Shanghai, Tokyo and Sydney retreated, but stocks rose slightly in Hong Kong.
Wall Street’s benchmark S&P 500 index on Thursday fell 2.1 percent to its lowest level in almost two years after strong US jobs data reinforced expectations the US Federal Reserve would stick to plans for more interest rate hikes.
Photo: AFP
Investors increasingly worry the global economy might tip into recession following interest rate hikes by the Fed and central banks in Europe and Asia to cool inflation that is at multidecade highs. Global export demand is weakening and Russia’s attack on Ukraine has disrupted oil and gas markets.
Markets on Thursday slipped after Germany reported that inflation last month accelerated to 10.9 percent and German Chancellor Olaf Scholz said the world’s fourth-biggest economy faces a “double whammy” as energy prices surge.
“We’d be inclined to argue that we haven’t yet seen the bottom,” ING economists said in a report.
The TAIEX on Friday fell 109.68 points, or 0.81 percent, to 13,424.58 on turnover of NT$207.93 billion (US$6.55 billion).
The Shanghai Composite Index lost 0.55 percent to 3,024.39 after surveys of manufacturers showed factory production, new export orders and manufacturing employment declined last month.
In Tokyo, the Nikkei 225 fell 1.83 percent to 25,937.21, to close the week down 4.48 percent, while the broader TOPIX lost 32.86 points, or 1.76 percent, to 1,835.94, losing 4.18 percent for the week.
Hong Kong’s Hang Seng Index rose 0.33 percent to 17,222.83, but was down 3.96 percent for the week, while South Korea’s KOSPI lost 0.71 percent to 2,155.49, falling 5.87 percent for the week.
Sydney’s S&P ASX 200 sank 1.23 percent to 6,474.2, losing 1.53 percent for the week, while India’s SENSEX Index rose 1.8 percent to 57,426.92.
Investors were already uneasy about signs global activity was weakening before Truss’ government announced multibillion-dollar tax cuts. Traders worry that will push up already high inflation, forcing the British central bank to cool economic growth by raising interest rates further.
Stock markets and the value of the pound rebounded on Wednesday after the Bank of England said it would buy government bonds to support their price, but markets resumed their slide on Thursday after Truss shrugged off criticism and defended her tax-cut plan despite an IMF plea to reverse course.
In China, surveys of manufacturers by business news magazine Caixin found production and news orders declined. That was in line with expectations that a Chinese manufacturing boom would fade due to weak global demand.
The Caixin monthly purchasing managers’ index declined from its August level, while a separate index by the China Federation of Logistics and Purchasing edged above a break-even point that shows activity increasing.
“The downturn in external demand looks set to deepen,” Capital Economics economist Zichun Huang said in a report.
Additional reporting by staff writer, with CNA
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