Asian Stock Market: Tumbles as recession fears deepen and China faces lockdown worries
- Asian equities are experiencing significant offers amid lockdown worries in China.
- Escalating recession fears have brought a dream rally in the DXY.
- Oil prices may display more losses as recession fears will stay for longer.
Markets in the Asian domain are displaying a vulnerable performance following the weakness in the risk-perceived currencies as recession fears deepen. The gloomy outlook from the Bank of England (BOE) on the global economy escalated recession fears. The statement from the BOE that the volatile oil and raw-material prices may bring economic shocks in the future brought an intense sell-off in the risk-sensitive assets.
At the press time, Japan Nikkei225 tumbled 1.17%, China A50 surrendered 1.50%, and Hang Seng dived 1.60%. However, Nifty50 is almost flat as optimism over the upcoming earnings season has supported the Indian equities.
No doubt, the households in the UK economy are facing their toughest phase of life as the economy has recorded the highest inflation rate at 9.1% in comparison to its G7 peers. Also, the political jitters in the UK economy amid resignations by top delegates have deepened recession concerns. The odds of a recession in the pound have accelerated significantly.
Chinese equities are facing intense selling pressure amid renewed lockdown fears. Back-to-back resurgence in the Covid-19 is impacting the sentiment of the market participants. There is no denying the fact that the Chinese economy is failing to combat the pandemic and other nations are facing its multiplier effects.
On the oil front, oil prices have plunged below the magical figure of $100.00. Soaring price pressures may result in lower demand for oil as the rise in wage prices is lacking the responsiveness of increment in the former. The black gold is displaying more downside potential and may find an establishment below $95 a barrel.