Asian shares decline as markets keep eyes on China meeting
Asian shares are mostly lower as investors focus on the weeklong Communist Party congress in China
TOKYO (AP) — Asian shares were mostly lower Monday as investors kept their eyes on the weeklong Communist Party congress in China.
Benchmarks dropped in Tokyo, Sydney, Seoul, Hong Kong and Shanghai in early trading. Oil prices and U.S. futures rose.
The meeting in China, which opened Sunday, is expected to reappoint Xi Jinping as leader for the next five years, reaffirming his grip on power and stronger state control over the economy. Analyst expect no change to the “zero-COVID policy.”
“Fresh updates from China’s Party Congress are being scrutinized, with the emphasis on technological advancement and national security seemingly brought up as high priorities for China’s longer-term direction. Further de-coupling f rom U.S. technology seems to be the story,” said Yeap Jun Rong, market strategist at IG in Singapore.
Japan's benchmark Nikkei 225 slipped 1.4% in morning trading to 26,715.47. Australia's S&P/ASX 200 dipped 1.4% to 6,665.20. South Korea's Kospi fell 0.1% to 2,209.89. Hong Kong's Hang Seng lost 1.1% to 16,399.46, while the Shanghai Composite fell 0.1% to 3,068.83.
Clifford Bennett, Chief Economist at ACY Securities, noted the U.S. dollar will likely continue to rise as interest rates push higher to counter inflation.
“The outlook is grim. The economic horizon is dark,” he said of the American economy. “”The U.S. dollar will continue to strengthen for the moment, particularly against other Western currencies."
In currency trading, the U.S. dollar fell to 148.60 Japanese yen from 148.63 yen. The euro cost 97.38 cents, up from 97.21 cents.
Worries about inflation, though cooling in some parts of the economy around the world, remain overall. On Wall Street, stocks ended last week with a broad slid, wiping earlier gains.
A report showing U.S. consumers’ expectations for inflation was another signal the Federal Reserve may keep aggressively raising interest rates, although that strategy raises the risk of a recession.
The S&P 500 fell 2.4% on Friday. The Dow Jones Industrial Average fell 1.3% and the Nasdaq composite ended 3.1% lower. Both indexes also turned lower after marching higher in early trading.
The Russell 2000 gave up 2.7%
The Fed has already raised its benchmark interest rate five times this year, with the last three increases by three-quarters of a percentage point. Wall Street expects another raise of three-quarters of a percentage point at its next meeting in November.
Investors have also been focusing on the latest earnings reports.
In energy trading, benchmark U.S. crude added 57 cents to $86.18 a barrel in electronic trading on the New York Mercantile Exchange. U.S. crude oil prices fell 3.9% Friday. Brent crude, the international standard, added 72 cents to $92.35 a barrel.
___
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
