Asian stocks fell due to concerns about the effects of the Fed’s interest rate hike

Closing the afternoon session of May 3, the stock market Asia all fell as investors were cautious about the prospect of US interest rate hikes and the possibility of other central banks doing the same to control inflation.

On Asian stock markets, liquidity decreased significantly because some main markets such as: Tokyo (Japan), Shanghai (China), Mumbai (India), Singapore and Jakarta (Indonesia) were closed for holidays. ceremony.

Notably, in Hong Kong (China), the Hang Seng index gained 0.1% and closed at 21,101.89 points.
The S&P/ASX 100 index on the Sydney stock exchange (Australia) closed down 0.42% at 7,316.2 points, after the Reserve Bank of Australia (central bank) raised interest rates from 0.1%. to 0.35%, the first rate hike since 2010.
Commodity prices skyrocketed, China’s moves to tighten monetary policy, China’s blockade measures to prevent the COVID-19 epidemic, the Russia-Ukraine conflict, and a stronger dollar, all of these factors appear together. time and make investors worried about the risk economy The world may once again fall into recession.

All attention is focused on the two-day policy meeting of the US Federal Reserve (FED) lasting two days from May 3 to 4, with the forecast that the agency will raise interest rates by 0.5 percentage points – for the first time since 2000.
US officials see tightening monetary policy as a necessary measure to control inflation, which is at a 40-year high, while maintaining economic growth.

However, there are growing concerns that these moves could slow the still fragile post-pandemic recovery and even push the economy to the brink of recession.

Meanwhile, the Fed’s policy committee is expected to discuss the release of trillions of dollars in bonds that the bank previously purchased under its quantitative easing (QE) program.
The press conference (after the Fed’s policy meeting) will provide important indications on the upcoming interest rate outlook, a question raised, said Stephen Innes of SPI Asset Management, an investment advisory firm. is: whether the Fed will raise it to 75 basis points.

Investors also expressed concern about a sharp decline in China’s manufacturing activity, mainly due to the country’s blockade of many key areas including the financial hub Shanghai.

The country’s authorities’ resolute implementation of the Zero COVID (No COVID-19) policy has had a strong impact on the world’s number two economy, and figures in other countries show that the negative impact is also widespread. globally.