Asian shares are tracking Wall Street ahead of a likely US rate hike

Asian shares are tracking Wall Street ahead of a likely US rate hike
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BEIJING (AP) — Asian stock markets followed Wall Street lower on Tuesday as traders braced for a possible steep interest rate hike by the Federal Reserve to cool inflation.

Shanghai, Hong Kong and South Korea declined. Tokyo has moved on. The price of oil changed slightly and remained below 100 dollars per barrel.

Wall Street fell on Tuesday after Walmart warned that inflation, hitting a 40-year high of 9.1%, was hurting American consumer spending.

The Fed is expected to announce on Wednesday that it will increase its usual margin by three-quarters of a percentage point, three times. That would be in line with a similar increase last month, the US central bank’s largest increase in 28 years.

Investors are worried that aggressive anti-inflation moves by the Fed and central banks in Europe and Asia could derail global economic growth.

“The main risk at this stage is virtually too much tightening of monetary policy and ‘excessive growth’ of inflation, which drives up the unemployment rate unnecessarily,” Thomas Costerg of Pictet Wealth Management said in a report. Thomas said most economic indicators and low commodity prices are already pointing to a slowdown in inflation.

The Shanghai Composite Index fell 0.1% to 3,273.32, while Tokyo’s Nikkei 225 advanced 0.1% to 27,692.89. Hong Kong’s Hang Seng fell 1.5% to 20,598.58.

In Seoul, the Kospi index decreased by 0.6% to 2,398.48, and in Sydney, the S&P-ASX 200 decreased by 0.1% to 6,798.20 points.

Southeast Asian markets declined while New Zealand advanced.

On Wall Street, the S&P 500 benchmark index fell 1.2% to 3,921.05. The Dow Jones Industrial Average was down 0.7% at 31,761.54. The Nasdaq composite fell 1.9% to close at 11,562.57.

Walmart fell 7.6% on Tuesday after the retail giant cut its profit forecast for the second quarter and full year. Rising food and gasoline prices are forcing shoppers to cut back on more affordable discretionary goods, especially clothing, he said.

Retailer’s profit alert is rare in the middle of a quarter and has raised concerns about how the highest inflation in 40 years is affecting the entire retail sector.

Other big chains also failed. Target was down 3.6%, Macy’s was down 7.2% and Kohl’s was down 9.1%.

Tech stocks pulled back. Microsoft lost 2.7%, Amazon lost 5.2% and Facebook-owned Meta Platforms lost 4.5%.

General Motors has since fallen 3.4% profit decreased by 40% in the second quarter from a year ago. U.S. sales fell 15% after a shortage of processor chips and other components prevented the company from delivering 95,000 vehicles during the quarter.

In the energy markets, US crude oil rose by 30 cents and reached $95.28 per barrel in electronic auctions on the New York Mercantile Exchange. The contract fell $1.72 to $94.98 on Tuesday. Brent oil, which is the basis of international oil prices, increased by 5 cents and reached $99.51/barrel in London.

The dollar rose to 136.97 yen from 136.00 yen on Tuesday. The euro rose to $1.0145 from $1.0120.

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