HONG KONG, Sept 16 — Asian markets sold off sharply today and Europe looked set to follow as investors braced for a hefty US rate hike next week amid growing concerns of a global recession following warnings from the World Bank and the International Monetary Fund.
“There is pain emerging in the equities markets and we are entering a phase where there will be further liquidation because rates are going to stay higher for longer,” said Suresh Tantia, senior investment strategist at Credit Suisse. Japan’s threats of currency intervention might slow but not stop the yen from hurtling towards three-decade lows before the year end, market analysts and fund managers say.
In early European trades, the pan-region Euro Stoxx 50 futures were down 0.76 per cent at 3,517, German DAX futures were down 0.93 per cent at 12,849, FTSE futures were down 0.61 per cent at 7,247.5.The global economic outlook remains downbeat and some countries are expected to slip into recession in 2023, but it is too early to say if there will be a widespread global recession, the IMF said yesterday.
The world’s three largest economies — the United States, China, and the euro zone — have been slowing sharply, and even a “moderate hit to the global economy over the next year could tip it into recession,”, it said. “China’s near term economic activity hinges on its Covid policies, how they manage it. With a more pragmatic approach, the market expects there would be more confidence that would inject more optimism into the market,” said Marcella Chow, a global market strategist at JPMorgan Asset Management.
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