Global markets fall over inflationary pressure

Global markets fall over inflationary pressure

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Global markets fell on Thursday as riskier assets were pulled down by continued inflationary pressure and expectations of a faster-than-expected rise in US interest rates.

Asia-Pacific stocks dropped dramatically on Thursday, following in the footsteps of the United States overnight. It comes at a time when market investors are already concerned about the fast-spreading omicron Covid strain, which has caused record daily infections in numerous nations in the last 24 hours.

Tech companies led the declines, plunging approximately 2.7 percent, with Nemetschek, a German software business, falling nearly 5%. Meanwhile, European markets tumbled on Thursday, adding to the worldwide downturn. During morning trading, the Stoxx 600 index fell 1.2 percent, with significant bourses and all sectors in negative territory.

The Nasdaq, a heavily weighted index in technology, fell more than 3%, its worst one-day drop since February, while the Dow Jones Industrial Average fell for the first time in 2022. Australian equities were also hit hard, with the S&P/ASX 200 down 2.7 percent.

Sony Group, based in Japan, was down 6.8%. The Nikkei 225 index in Japan fell 2.9 percent as the rush to get out of tech equities impacted high-profile corporations. The Shanghai composite fell 0.25 percent in mainland China, while the Shenzhen component fell 0.1 percent. Outside of Japan, MSCI’s broadest index of Asia-Pacific stocks fell 1.3 percent. 

The losses follow the release on Wednesday of minutes from the Federal Reserve’s important December meeting. In another step to rapidly dial back its pandemic-era loose monetary policy, the central bank proposed decreasing its balance sheet.

On Thursday, Bitcoin and other cryptocurrencies fell in value. At 2:59 a.m. ET, Bitcoin was trading slightly below $43,200, down roughly 7% from the previous day. Ether was also down nearly 10% to $3,452.58.

The CNIL, France’s data privacy authority, announced that Google (GOOGL) had been fined a record $169 million.

Concerns about rising interest rates in the United States, combined with mounting concerns about the increasing spread of the Omicron coronavirus strain, have put a damper on risky assets.

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