Asian stocks fell on Friday after steep losses in the United States and Europe as worries about the economy escalated following a series of rate hikes around the world.
The United Kingdom and Switzerland raised interest rates on Thursday, a day after the U.S. central bank announced its biggest interest rate hike since 1994.
Policymakers are raising rates to slow demand in hopes of easing some of the pressures pushing consumer prices higher.
Investors fear that these measures could tip the global economy into a lasting slowdown.
“The Federal Reserve will raise interest rates until policymakers break inflation, but the risk is that they also break the economy,” Ryan Sweet of Moody’s Analytics said after the news broke. rising US rates.
Markets were already in fragile territory, with the S&P 500 down more than 20% from its January high ahead of the US rate hike this week.
On Friday, Japan’s Nikkei and Australia’s main stock index fell more than 2%, although shares in Hong Kong and Shanghai rose.
It came after Thursday saw a selloff in the US, with the S&P 500 falling 3.2%, while the tech-heavy Nasdaq fell more than 4%.
The Dow Jones Industrial Average fell more than 2.4%, taking it below 30,000 points for the first time since January 2021.
Few companies have been spared, with firms reliant on discretionary spending, such as Nike and airlines, among the hardest hit.
Energy companies, which would also see their demand fall in the event of an economic downturn, also fell.
Tesla shares fell 8.5% after the company unveiled price increases following rising costs. The electric car maker’s Autopilot features are also being scrutinized by US highway safety regulators.
Spotify also fell 7%, a day after the streaming giant said it was slowing hiring amid economic uncertainty, becoming the latest major tech company to announce such a move.
Surprise rise of Switzerland
In the UK, where the Bank of England has warned inflation could climb to 11% this year, the FTSE 100 ended Thursday down more than 3%,
British online fashion retailer Asos fell 32.5% after warning investors that inflationary pressures were affecting shopping behavior.
The German Dax index fell more than 3%, while the French Cac 40 ended down 2.4%.
The benchmark Stoxx 600 index hit its lowest level since February 2021.