Tightening pressure haunts markets
As optimism about the gradual end of the closure measures in China disappears
Wednesday – 9 Dhu al-Qi’dah 1443 AH – 08 June 2022 AD Issue no. [
Concerns prevailed in world markets yesterday as expectations of sharp monetary tightening increased (Reuters)
London: “Middle East”
World stock markets declined yesterday (Tuesday) as optimism about ending austerity measures in China gradually faded, and investors worried about the impact of too much monetary policy on global economic growth.
The Australian Central Bank has raised interest rates with the highest rate in almost 22 years, indicating more sharpening in the coming period, while investors await this week’s European Central Bank meeting and US inflation data.
Wall Street’s major stock indices opened lower after Target lowered its quarterly earnings forecast, raising concerns about declining demand amid inflationary pressures and lowering retail stocks.
The Dow Jones Industrial Average fell 132.75 points, or 0.40%, to 32,783.03 points. The “Standard & Poor’s 500” index fell by 24.96 points, or 0.61%, to 4,096.47 points. The Nasdaq Composite Index fell 135.56 points, or 1.12%, to 11,925.81 points.
In Europe, the “European Stoxx 600” index fell 0.4% at 07:09 GMT. Technology stocks led the decline as the sector fell 0.7%, following in the footsteps of U.S. tech stocks that fell the previous night. The French “Dassault Systems” stock was the biggest loser on the “Stoxx” index, after a brokerage firm lowered its estimates for the value of the stock.
The British Financial Times Index stabilized with the fall of the pound sterling, and British Prime Minister Boris Johnson sought to strengthen his position by introducing a set of new policies after surviving a vote of confidence that surpassed the size of the pound. threat he faced in office. .
Scandinavian Airlines’ (SAS) shares fell 11.5% after the Swedish government said it would not inject new capital into the loss-making company, nor try to be a long-term investor in it.
In Asia, the Japanese Nikkei index gave up most of its gains to close flat, as concerns about inflation and high interest rates in the United States overshadowed the rise of carmakers and energy-related stocks.
The index rose 0.1% to 27943.95 points, after exceeding 28 thousand points for the first time since March 31. The broader Topix index rose 0.41% to 1947.03 points.
Shares of carmakers rose after the dollar jumped against the yen. This was helped by rising expectations of persistent inflation, which boosted US bond yields. The auto and parts industry sub-index rose 1.55%. The shares of oil exploration companies rose by 2.99%, and its index was the largest rise among the 33 sub-indices of the industry in the Tokyo Stock Exchange, supported by the rise in oil prices.
The leading stock-related stocks hit the “Nikkei” as “Tokyo Electron” shares lost 2.11%, and “Advantest” shares fell 2.51%. Kawasaki Heavy Industries lost 4.36% and was the worst performer on the Nikkei index, after the company said there were breaches in one of its subsidiaries.
In turn, gold prices rose yesterday (Tuesday) due to investors ‘concerns about the consequences of central banks’ plans to tighten monetary policy, but the rise in US bond yields, which supported the dollar price, limited the rises.
The price of gold rose 0.2% in spot trading, reaching $ 1845.20 per ounce at 08:42 GMT, recovering after reaching $ 1836.10 per ounce, the lowest level in a week. And the price of U.S. gold futures rose 0.2% to $ 1,849 an ounce.
World stock prices fell after the Reserve Bank of Australia raised interest rates surprisingly by half a percentage point, raising concerns about the trend towards further tightening of monetary policy. The European Central Bank will meet later this week, and the US Federal Reserve’s Open Market Committee will meet on June 14-15.
Analysts at “JP Morgan” expected gold to fall to an average of $ 1,800 in the third quarter of the year, amid an expected recovery in investor appetite for risks and the continued rise in US bond yields. The increase in interest rates limits the demand for the purchase of gold, as it increases the opportunity cost to buy the metal that does not generate a return.
For other precious metals, the price of platinum decreased by 0.9% to $ 1,008.63 per ounce, palladium increased by 0.5% to $ 2013.22 per ounce and silver increased by 0.2% to $ 22.02 per us dropped.