Asian Stocks Plummet as US Inflation in July is Expected to Cool Down

Author: Rose Benson

Investors are welcomed by a report stating that Asian stocks dropped ahead of the U.S inflation. 

This news brings on highlights about the Federal Reserve; traders wonder if it will remain aggressive when it comes to interest rate hikes. 

Initially, the rise in interest rates was an effort to keep the economy as it was before. Thus, it is part of the wonders of many. 

Moreover, it is the Seoul, Hongkong, Tokyo, and Shanghai that declined, which pushed the Asian stocks to plunge. 

As a matter of fact, even oil prices have edged lower. On Wall Street’s benchmark, the S & P 500 index lost 0.4%. It is a consistent fallback, marking it as the fourth daily decline. 

More details about the Asian stocks and more

Despite the expectations of the U.S. inflation ease from the previous month, traders think differently. According to a survey, the majority of the traders expect core inflation to edge higher. 

The expected results for that include stripping out volatile food and energy while making rent and other costs go higher. These are the traders’ expectations regardless of reliable data showing that the economy is slowly cooling down. 

Back to Asia stocks, there is a real decline in most of them. In particular, Kospi in Seoul dropped 0.9%, falling to 2,480.20. Meanwhile, the Hang Seng in Hong Kong plummeted by 2.2%, leading to 19,559.33. The Nikkei 225 in Tokyo fell 0.7% to 27,803.26, while the Shanghai Composite Index plunged 0.6% to 3,227.98. 

It is not only the Asian stocks that sank but also Sydney and India. In fact, Sydney’s S&P-ASX 200 lowered 0.3% and ended up at only 7,005.70. On the other hand, India’s Sensex went to less than 0.1% and fell to 58,827.86. Surely, the Southeast Asian market has retreated. Even New Zealand fell into the same path as the Southeast Asian market. 

Even with the hopeful inflation status of the U.S., many acknowledge the possibility of its economy tipping into recession. Nonetheless, there are pieces of convincing evidence that the economy can endure more hikes in rates, including the strong job market.

Takeaway

Undeniably, the stock market is also greatly impacted and rattled by the war between Russia and Ukraine. The war caused negative impacts, including the spike in prices of oil, and wheat, together with several other commodities. 

At the same time, the pandemic and uncertainty about safety measures for it also caused significant disruption to trade and manufacturing. Of course, it is hard to deny that the pandemic caused no harm. In fact, life halted because of that. 

Problems of the world always have strong effects, primarily obstructing global economic growth. Nonetheless, there are efforts made to manage those negative impacts.