Skip to Content

World markets extend Wall St losses; China COVID cases rise

AP Business Writer

BANGKOK (AP) — World shares fell Monday after last week’s decline on Wall Street, while signs of a s urge in coronavirus infections in China suggested progress may be uneven as it rolls back its “zero-COVID” pandemic restrictions.

Attention was turning to an update on U.S. consumer prices and the Federal Reserve’s last meeting of the year.

The last big piece of data on inflation before the Fed’s next decision is due Tuesday, when economists expect the consumer price index to show inflation slowed to 7.3% last month from 7.7% in October.

Meetings of major central banks including the Fed mean “there is potential for a whole load of volatility in markets; especially given the palpable tensions between inflation risks and fears of policy-induced recession,” analysts at Mizuho Bank said in a commentary.

Germany’s DAX lost 0.5% to 14,295.91 and the CAC 40 in Paris shed 0.4% to 6,653.29. Britain’s FTSE 100 gave up 0.3% to 7,453.26.

The futures for the S&P 500 and the Dow Jones Industrial Average edged 0.1% lower.

China was setting up more intensive care facilities and trying to strengthen hospitals as it rolls back anti-virus controls that confined millions of people to their homes, crushed economic growth and set off protests.

The precautions come as the number of cases appeared to be rising, though a sharp reduction in the number of tests being administered makes measuring any changes difficult.

President Xi Jinping’s government is officially committed to stopping virus transmission, the last major country to try. But the latest moves suggest the ruling Communist Party has decided to tolerate more cases without quarantines or shutting down travel or businesses as it winds down its “zero-COVID” strategy.

Hong Kong’s Hang Seng sank 2.1% to 19,475.16 and the Shanghai Composite index shed 0.9% to 3,179.04.

Shares in e-commerce and other tech-related companies that thrived during the days of lockdowns as home deliveries soared were sharply lower. Meituan fell 7% and Baidu also dropped 7%. E-commerce giant Alibaba sank 3.8% and lost 2.9%.

Tokyo’s Nikkei 225 index gave up 0.2% to 27,842.33 after a survey of Japanese manufacturers released Monday showed a sharp deterioration in their outlook, with recession a growing possibility in the U.S. and other major markets. The business survey index fell to minus 3.6% in October-December from 1.7% in the previous quarter as manufacturers grappled with high prices for energy and other raw materials.

The Kospi in Seoul lost 0.7% to 2,373.02 and Australia’s S&P/ASX 200 declined 0.5% to 7,180.80.

Markets in Thailand were closed for a holiday.

A choppy day of trading on Wall Street ended with stocks broadly lower Friday.

The S&P 500 and Nasdaq composite each fell 0.7%, while the Dow Jones Industrial Average dropped 0.9%. Smaller company stocks fell even more, pulling the Russell 2000 index 1.2% lower. The indexes marked their first losing week in the last three.

The S&P 500 finished 3.4% lower for the week and is now down 17.5% this year.

The U.S. government reported that prices paid at the wholesale level were 7.4% higher in November than a year earlier. That’s a slowdown from October’s wholesale inflation rate of 8.1%, but it was still slightly worse than economists expected.

The Fed has been battling inflation by aggressively raising interest rates to raise the cost of borrowing and slow economic activity. The central bank has already hiked its key overnight rate to a range of 3.75% to 4%, up from basically zero as recently as March.

It is expected to raise rates by another half percentage point on Wednesday as it wraps up a two-day meeting.

Stocks have been battered this year by the withdrawal of pandemic stimulus and rising rates, which make other investments more attractive. They’ve recovered some of their losses recently, as inflation has slowed since hitting a peak in the summer. But price gains remain high, raising the risk the Federal Reserve will have to keep hiking interest rates sharply to get it fully under control.

In other trading Monday, U.S. benchmark crude oil lost 21 cents to $71.81 per barrel in electronic trading on the New York Mercantile Exchange. It lost 44 cents to $71.02 on Friday.

Brent crude, the pricing basis for international trading, dropped 35 cents to $75.75 per barrel.

The U.S. dollar rose to 136.88 Japanese yen from 136.60 yen. The euro rose to $1.0550 from $1.0537.

Article Topic Follows: AP National News

Jump to comments ↓



ABC 17 News is committed to providing a forum for civil and constructive conversation.

Please keep your comments respectful and relevant. You can review our Community Guidelines by clicking here

If you would like to share a story idea, please submit it here.

Skip to content