Global stocks fall ahead of Federal Reserve meeting
BEIJING — Global stocks and Wall Street futures fell on Monday as investors eagerly awaited this week’s Federal Reserve conference for signals on possible U.S. rate hikes to calm the surge. of inflation.
London and Frankfurt opened lower. Tokyo and Hong Kong fell. Shanghai, the only major market to advance, rose after China’s central bank cut a rate that affects mortgage costs. Oil prices fell more than $1.50 a barrel.
Investors watch the Fed’s annual meeting in Jackson Hole, Wyoming, after minutes from the U.S. central bank’s July board meeting last week affirmed plans to hike rates despite signs of slowing economic activity. Traders fear that aggressive measures to contain inflation, which is at multi-decade highs, could derail global economic growth.
“The Fed is still feeling inflation. Its actions haven’t even begun to dampen inflationary pressures at all,” Clifford Bennett of ACY Securities said in a report. “They also haven’t started to dampen economic activity. The economic downturn was already in play for other reasons.”
In early trading, the FTSE 100 in London fell 0.7% to 7,494.91 and the DAX in Frankfurt fell 1.1% to 13,544.52. The CAC 40 in Paris fell 1.6% to 6,389.86.
On Wall Street, the benchmark S&P 500 index futures lost 0.6% and the Dow Jones Industrial Average lost 0.5%.
On Friday, the S&P 500 lost 1.3%. It ended down 1.2% for the week. The index is down 11.3% this year.
The Dow fell 0.9% and the Nasdaq lost 2%.
In Asia, the Shanghai Composite Index rose 0.6% to 3,275.93 after the People’s Bank of China cut its prime lending rate, a target for market interest rates, for a loan five-year term aimed at consolidating weak home sales.
The Nikkei 225 in Tokyo fell 0.5% to 28,794.50. The Hang Seng in Hong Kong fell 0.6% to 19,656.98.
South Korea’s Kospi fell 1.2% to 2,462.50 and Sydney’s S&P ASX-200 fell 1% to 7,046.90.
The Indian Sensex opened 1% lower at 59,017.57. New Zealand, Singapore and Bangkok advanced while Jakarta slipped.
China’s central bank cut its five-year lending target by 0.15 percentage points to 4.3%. The rate for a one-year loan, which affects other industries, was lowered by only 0.05 percentage points to 3.65%.
The ruling Communist Party is trying to revive economic growth after a debt crackdown caused property sales to plummet and Shanghai and other industrial cities shut down for weeks from late March to fight coronavirus outbreaks. virus.
The move “reflects the severity” of the real estate crisis and shows Beijing is “ready to take stronger action,” Invesco’s David Chao said in a report.
Chinese leaders are trying to revive economic growth without resorting to broad stimulus measures that could drive up inflation or politically sensitive housing costs.
In energy markets, benchmark U.S. crude fell $1.52 to $88.92 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international trade, fell $1.55 to $95.17 a barrel in London.
The dollar rose to 137.13 yen from 136.91 yen on Friday. The euro fell from $1.0034 to $1.0016.