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Global Stock Markets Sink Again Over Recession Fears
- By The Financial District
- Dec 20, 2022
- 2 min read
Global stock markets fell Monday, Dec. 19, 2022, as investors wrestled with fears the Federal Reserve and European central banks might be willing to cause a recession to crush inflation.
Photo Insert: Wall Street fell Friday after the Fed raised its forecast of how long interest rates have to stay elevated to cool inflation that is near a four-decade high.
Frankfurt, Shanghai, Tokyo and Wall Street futures declined. London rose. Oil prices advanced, Joe McDonald reported for the Associated Press (AP).
Wall Street fell Friday after the Fed raised its forecast of how long interest rates have to stay elevated to cool inflation that is near a four-decade high.
The European Central Bank (ECB) warned more rate hikes are coming. That “hawkish rhetoric” indicates “mounting pipeline risks of a global recession,” said Tan Boon Heng of Mizuho Bank in a report.
In early trading, the DAX in Frankfurt lost 0.7% to 13,893.07 and the CAC 40 in Paris fell 1.1% to 6,452.63. The FTSE 100 in London gained 0.3% to 7,356.32. On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were off less than 0.1%.
On Friday, the S&P 500 index lost 1.1% and turned in its second weekly decline. It is down about 19% this year. The Dow dropped 0.8% and the Nasdaq composite lost 1%.
In Asia, the Shanghai Composite Index lost 1.5% to 3,118.95 despite the ruling Communist Party announcing Friday it will try to reverse China’s economic slump by stimulating domestic consumption and the real estate market.
The Nikkei 225 in Tokyo sank 1.1% to 27,226.12 and the Hang Seng in Hong Kong shed 0.5% to 19,359.03. The Kospi in Seoul retreated 0.6% to 2,346.49 and Sydney’s S&P-ASX 200 was 0.2% lower at 7,133.90.
India’s Sensex lost 0.8% to 61,337.81. Singapore and Bangkok advanced while New Zealand and Jakarta declined. US consumer inflation has eased to 7.1% over a year earlier in November from June’s 9.1% high but still is painfully high.
