Asian stocks struggle, oil prices drop as recession worries persist

n Thursday, Asian equities remained flat or negative and commodities prices dropped as general investor confidence remained unstable due to growing concerns about a global recession

June 23, 2022 9:41 IST | India Infoline News Service
The largest MSCI index of shares outside of Japan from the Asia-Pacific region reversed previous advances to trade mainly flat in Asia. South Korean stocks fell, while the Nikkei in Japan was largely unchanged.

Following the announcement that Chinese President Xi Jinping presided over a top-level conference on Wednesday that approved a strategy for the healthy development of China's large payment enterprises and fintech industry, Hong Kong's Hang Seng Index increased by 0.6%.

In testimony to the U.S. Senate Banking Committee, Fed Chair Jerome Powell conceded that a recession was "definitely a possibility," but said the Fed was not seeking to orchestrate one. This caused the dollar and U.S. Treasury yields to drop overnight.

U.S. stocks wiped out earlier gains and ended the session marginally down. The S&P 500 lost 0.13%, the Nasdaq Composite plummeted 0.15%, and the Dow Jones Industrial Average fell 0.15%.

Investors are still evaluating the chances that central banks could cause a global recession in an effort to combat inflation by raising interest rates.

Commodity prices have been decimated by worries about the demand forecast, with oil plunging to its lowest point on Thursday in more than a month. U.S. crude fell 2.3% to $103.75 per barrel while Brent crude fell 2% to $109.49 per barrel.

The dollar declined 0.1% versus a basket of major currencies in the foreign currency markets, following a 0.2% decline in the previous session. The index did, however, increase by more than 8% this year, indicating both the general risk-off mood and the dollar's Fed-driven yield advantage.

The South Korean won underlined those reasons when it dropped below a critical level of 1,300 won per dollar for the first time in 13 years amid concerns about an impending global economic slump.

Spot prices for gold were marginally lower, trading at $1835.19 per ounce.

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