Stock market today: Asian markets track Wall Street decline

Asian stocks fell on Wednesday, tracking losses on Wall Street before making a decision interest rates by the Federal Reserve.

US futures rose while oil prices were little changed.

The Federal Reserve is scheduled to wrap up a two-day policy meeting later in the day. It is widely expected to raise the key interest rate by a quarter of a percentage point to 5 per cent – 5.25 per cent in a bid to finally curb inflation.

Meanwhile, political stalemate has brought the United States ever closer to what could be a catastrophic default on government debt.

President Joe Biden called the four top congressional leaders For face-to-face talks at the White House next week to try to solve the problem.

“Risk sentiment has returned to a dovish mood this week, after absorbing many big tech gains and a streak of uncertainty is now back on the radar for the bulls to grapple with,” Yeap Jun Rong of IG Research said in a commentary.

markets performance

Markets in Japan and China are closed on Wednesday due to holidays. In Hong Kong, the Hang Seng Index lost 1.6 percent, to 19,608.54. The Kospi Index in South Korea fell 0.9 percent to 2,500.50 and the S & P / ASX 200 in Sydney fell 1.1 percent to 7,184.90.

Stocks in Taiwan and Southeast Asia also fell.

in India , Nifty 50 fell 0.48 percent to 18,061.42, while the S&P BSE Sensex lost 0.348 percent in early trading.

On Tuesday, the S&P 500 fell 1.2 percent to 4,119.58 and the Dow Jones fell 1.1 percent to 33,684.53. The Nasdaq Composite Index lost 1.1 percent, to 12,080.51.

The banking system is under stress

Some of the sharpest falls have come from small and medium-sized banks, which have come under intense scrutiny as the banking system collapses under the weight of much higher interest rates.

Backwest Bancorp fell 27.8 percent, Western Alliance Bancorp fell 15.4 percent, and Comerica fell 12.4 percent.

Also read: Lessons for India from the US Bank Disaster

Three of the four largest US bank failures in history Since last March, investors have been looking for the next one that is likely to fall out or suffer an exodus of customers.

Adjust the regulators First Republic Bank at the beginning of this week sold most of it to JPMorgan Chasewhich raised hopes that the unrest could subside.

Adding to concerns, a report showed that US employers reported the lowest number of job vacancies in nearly two years during the month of March.

the The labor market was one of the main pillars Supporting a slowing economy, a slowdown there would likely mean a recession.

Already high rates have hit the housing market sharply and hurt the banking system. Many investors are preparing for a recession that will happen later this year.

Early X history

Adding to the gloom, Treasury Janet Yellen He said late Monday that the US government could default on its debt as early as June 1 unless a divided Congress allows it to borrow more. This “X date” is earlier than previously thought.

Much of the financial system is built on the assumption that US government debt is the safest investment available. The hope is that Congress will strike a deal before the deadline, as it has done so many times before, because the alternative would be absolutely dire.

With only weeks left before June 1, Congress may have to agree to an extension of just a few months, rather than a long-term agreement.

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“There may be a few more debt ceiling deadlines ahead of the 2024 election,” UBS strategists led by Michael Cloherty wrote in a report.

In the bond market, the yield on the 10-year Treasury fell to 3.42 percent from 3.57 percent late Monday. But early Wednesday it was at 3.54 percent.

In other trading on Wednesday, US benchmark crude oil lost 3 cents to $71.63 a barrel in electronic trading on the New York Mercantile Exchange. It fell $4 on Tuesday.

Brent crudeThe global oil pricing basis rose 3 cents to 75.35 dollars a barrel.