Global stocks fall as result of interest rate and earnings concerns

Global stocks fall as result of interest rate and earnings concerns

Global stocks fall as result of interest rate and earnings concerns

European markets fell on Monday, following Asian losses, as fears about interest rate rise dominated a range of investor concerns.

The Shanghai Composite index plunged 5.1 percent, while Hong Kong fell 3.7 percent, as China strengthened its pandemic measures and case counts increased.

Oil prices fell by more than $4 per barrel, and the US dollar was trading close to 128 Japanese yen.

The CAC 40 in France fell 2.0 percent in early trade to 6,451.27.

The news that Emmanuel Macron won the run-off French presidential election over the weekend, earning a second term as predicted, reassured investors that France would not suddenly change direction in the middle of the Ukrainian conflict.

However, the substantial performance by candidate Marine Le Pen, a populist and nationalist, served as a reminder of how unstable that position may be, according to observers. Le Pen promised to weaken France's connections with the EU, NATO, and Germany, and she criticised EU restrictions on the Russian energy supply.

The DAX in Germany fell 1.4 percent to 13,943.88. The FTSE 100 in the United Kingdom fell 2.2 percent to 7,354.94. The Dow industrials futures were down 0.7 percent, while the S&P 500 futures were down 0.8 percent.

In Asian trade, Japan's Nikkei 225 index fell 1.9 percent to 26,590.78. The Kospi in South Korea fell 1.8 percent to 2,657.13. The Hang Seng sank 770 points to 19,869.34 in Hong Kong, while the Shanghai Composite fell 158 points to 2,928.51 in Shanghai, falling below 3,000 for the first time since July 2020.

Baidu's Hong Kong-traded shares fell 7%, while PetroChina's shares fell 4% due to declining oil prices.

Rising COVID-19 infections in China are raising fears of further pandemic lockdowns, which would stymie regional economic recovery. After the number of reported cases increased, Beijing implemented lockdowns in many districts.

Investors are also looking forward to earnings reports from corporations, especially Japanese household brands, in the coming weeks. Several reports from U.S. corporations that have already been issued have been disappointing, adding to Wall Street's slide that concluded last week.

Investors are concerned about what the United States Federal Reserve could do. The chairman of the Federal Reserve has signalled that the central bank may raise short-term interest rates by twice as much as normal at future meetings beginning in two weeks. The Fed's main overnight rate has already been lifted once, the first time since 2018.

Markets throughout the globe are facing comparable pressure on interest rates and inflation, notably in Europe as the Ukraine conflict drives up the cost of oil, gas, and food.

On the New York Mercantile Exchange, benchmark US crude fell $4.71 to $97.36 a barrel in electronic trading. Brent oil, the world's benchmark, dropped $4.86 to $101.29 a barrel.

The US dollar fell to 128.11 Japanese yen from 128.59 yen in currency trade. The euro now costs $1.07444, a decrease from $1.0803.

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