Asian stock markets under pressure due to interest rate fears and Middle East conflict
Quick Look
- Fears of rising interest rates in the USA and Japan as well as the escalation in the Middle East are weighing on the Asian markets.
- While the Nikkei fell, Chinese mainland stock markets appeared more resilient despite weak economic data.
AI-generated summary
Why It Matters
Asian markets are reacting to expectations of rising interest rates from the US Federal Reserve and the Bank of Japan. At the same time, the geopolitical situation in the Middle East is causing uncertainty.
Fears of a change in interest rates and the renewed escalation of the military conflict in the Middle East weighed on the Asian stock markets at the start of the week.
Sydney, Singapore, Tokyo, Beijing. Fears of rising interest rates and a military escalation in the Middle East hit Asian stock markets at the start of the week on Monday.
The Nikkei index fell 0.4 percent to 66,155 points on Monday.
The broader Topix was up 0.2 percent at 4,156 points.
Prices also fell in Hong Kong. The Shanghai Stock Exchange, on the other hand, was able to make up for its interim losses and gained 0.9 percent.
The CSI 300 index with the 300 most important Chinese companies on the mainland stock exchanges rose by 0.35 percent to 4,625 points.
In Japan, sentiment was depressed by statements from US Federal Reserve Chairman Kevin Warsh, who emphasized the fight against inflation and thus fueled expectations of an imminent interest rate hike. In addition, the markets are pricing in an almost certain interest rate hike by the Bank of Japan (BOJ) next month. Investors currently estimate the probability of this to be almost 70 percent.
“Growing expectations of U.S. interest rate hikes are likely to weigh on investor sentiment,” said Takayuki Miyajima, chief economist at Sony Financial Group. The biggest losers in the Nikkei included Advantest, down 4.5 percent, as well as Japan Steel Works, down 5.6 percent, and Mitsubishi Materials, down 6.6 percent.
In China, mixed economic data came into focus. Industrial activity improved slightly to 49.8 points in August, but remained in contraction territory for the second month in a row. “It is too early to conclude that the economy is recovering,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
What to Watch
AI outlook — possibilities, not facts
The Bank of Japan will raise interest rates next month
Likely · Within weeks
Open Questions
- How much will the Bank of Japan raise interest rates?
- How is the conflict in the Middle East developing?
