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After the US Fed predicts further rate increases, Asian stocks decline

After the US Fed predicts further rate increases, Asian stocks decline

After the US Fed predicts further rate increases, Asian stocks decline

After the US Fed predicts further rate increases, Asian stocks decline

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  • Hong Kong’s benchmark shares index fell by 3.1 percent on Thursday.
  • Fed increased its key rate to the highest level in 15 years.
  • Oil prices declined following the US Federal Reserve’s decision to raise rates.
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Asian stock markets have fallen as the US Federal Reserve stoked recession fears by announcing that it was still hiking interest rates in the nation to curb inflation.

Following Wall Street lower, the benchmark in Hong Kong fell by 3.1 percent on Thursday as the Fed increased its key rate to the highest level in 15 years.

While the euro maintained a value below 99 cents, oil prices declined.

The Fed increased its short-term lending rate by 0.75 percentage points, three times its average margin, for the fourth time this year, sending Wall Street’s benchmark S&P 500 index down 2.5 percent.

We still have a ways to go, Fed Chair Jerome Powell said, reinforcing prospects of additional rate increases. It would be “extremely premature,” he remarked, to think of pausing.

James Knightley, Padhraic Garvey, and Chris Turner of ING stated in a research that “recession risks are increasing, but that is the price the Fed is prepared to pay to get inflation under control.”

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Sydney’s S&P-ASX 200 dropped 1.9 percent to 6,855.40, while Hong Kong’s Hang Seng lost 488 points to 15,338.85.

To 2,997.46, the Shanghai Composite Index fell 0.2 percent. Due to a holiday, Japanese marketplaces were closed.

Seoul’s Kospi decreased by 0.6 percent to 2,322.11. Markets in Southeast Asia and New Zealand also declined.

This year, rates were aggressively increased by the Fed and central banks in Europe and Asia in an effort to curb inflation, which is at multi-decade highs.

Investors are concerned it might send the world economy into a recession.

Similar to the previous month, consumer prices in the US increased by 6.2 percent over a year in September. To provide a clearer picture of the trend, core inflation, which does not include volatile food and energy costs, increased from August’s 4.9 percent to 5.1 percent.

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The Fed said on Wednesday that it might switch to a slower pace of rate increases and would take the overall economic impact into account.

The S&P 500 on Wall Street decreased to 3,759.69. To 32,147.76, the Dow Jones Industrial Average fell 1.5 percent. To 10,524.80, the Nasdaq composite fell 3.4 percent.

The biggest decliners included retailers, healthcare providers, and technology stocks.

Johnson & Johnson, Inc. declined 1.5 percent, Amazon.com, Inc. plummeted 4.8 percent, and Apple, Inc. also experienced declines.

Investors are hoping that indications of a slowdown in housing sales and other economic activity will prompt the Fed to scale down its rate-hike plans.

However, the most recent indicators, particularly regarding hiring, are relatively solid, suggesting the Fed may continue to be aggressive.

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On Thursday, the US government is scheduled to issue data on unemployment, and on Friday, a report on the overall job market.

In the energy sector, New York Mercantile Exchange electronic trading saw benchmark US crude drop 43 cents to $89.57. On Wednesday, the contract increased $1.63 to $90.

The benchmark price for global oil trading, Brent crude, dropped 27 cents to $95.89 per barrel in London. The previous day, it increased $1.51 to $96.16 per barrel.

From 146.94 Japanese yen on Wednesday, the US dollar increased to 147.33 yen. From 98.83 cents, the euro dropped to 98.26 cents.

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