ASIAN stock markets declined Thursday, April 13, 2023, after the Federal Reserve said its economists expect a “mild recession” this year.
Shanghai, Hong Kong, Seoul and Sydney retreated. Tokyo advanced. Oil prices fell.
Wall Street closed lower Wednesday after notes from the central bank’s latest meeting said its economists expect lower bank lending to cause a “mild recession.” Traders already saw an increasing likelihood of at least a brief U.S. recession this year following interest rate hikes to cool inflation.
Government data showed consumer prices rose five percent in March, well above the Fed’s two percent target.
“It seems to be brewing recession fears that shook risk sentiments,” said Yeap Jun Rong of IG in a report. The Fed report “erodes chatters of a soft landing scenario.”
The Shanghai Composite Index lost 0.4 percent to 3,312.79 while the Nikkei 225 in Tokyo added 0.2 percent to 28,140.27. The Hang Seng in Hong Kong retreated 0.7 percent to 20,160.84.
The Kospi in Seoul gave up 0.1 percent to 2,548.61 while Sydney’s S&P ASX fell 0.4 percent to 7,313.90.
India’s Sensex opened down 0.4 percent at 60,149.89. New Zealand and Singapore advanced while Jakarta declined.
Extinguish inflation
Traders have been worried the Fed and other central banks in Europe and Asia might tip the global economy into recession as they try to extinguish inflation that is near multi-decade highs.
That anxiety was briefly drowned out by fears about the health of global banks following two high-profile failures in the United States and one in Switzerland.
But regulators appear to have quelled those concerns by promising more lending and other steps if needed to stabilize banks.
On Wall Street, the benchmark S&P 500 index fell 16.99, or 0.4 percent, to 4,091.95. About 65 percent of stocks within the index fell.
The Dow Jones Industrial Average slipped 38.29, or 0.1 percent to 33,646.50. The Nasdaq composite lost 102.54, or 0.9 percent, to 11,929.34. (AP)