Asian stocks fell on Friday as investors worried about the global economic outlook, with concerns about rising inflation and interest rates weighing on sentiment.
The MSCI Asia Pacific index fell 1.3%, with all major markets in the red. Japan’s Nikkei 225 index fell 1.7%, while South Korea’s Kospi index fell 1.6%.
The sell-off in Asia followed a sell-off on Wall Street overnight, where the S&P 500 index fell 2.4%.
Investors are concerned about rising inflation and interest rates’ effect on economic growth. The US Federal Reserve plans to raise interest rates by 50 basis points in its upcoming meeting. Other central banks are also anticipated to tighten monetary policy.
These moves are necessary to cool inflation, but they could hinder economic growth.”The risk of stagflation is rising,” said Jeffrey Halley, a senior market analyst at Oanda. “The Fed is walking a tightrope between containing inflation and avoiding recession.”
Concerns about inflation and interest rates have raised investor worries.The war in Ukraine is also a significant concern for investors. They fear its impact on the global economy. In addition to inflation and interest rates, the war’s effects are causing unease. The war disrupted energy and food markets. Sanctions against Russia followed, hurting the Russian economy.
The combination of these factors has led to a darkening outlook for global growth. The International Monetary Fund has lowered its forecast for global growth in 2022, and it warned that the war could have a “severe impact” on the global economy.
As a result of concerns, investors sell stocks and buy safe-haven assets like bonds. The yield on the 10-year US Treasury note fell to 2.77% on Friday, marking a two-week low.
The sell-off in Asia may persist as investors worry about the global economy. Positive inflation news could boost sentiment and support stocks.
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