Global stocks turn sluggish as Wall St retreats on rate hike worries

Bangkok: World shares were mixed Thursday after a retreat on Wall Street spurred by comments indicating the Federal Reserve intends to more aggressively tackle inflation. Benchmarks rose in Paris and Frankfurt after declines in most Asian markets. US futures fell while oil prices were higher. The Fed comments have added to investor unease over the war in Ukraine, corona virus outbreaks in China and persistent high inflation. Minutes from the Fed's meeting last month showed policymaker's agreed to begin cutting the Fed's stockpile of Treasury's and mortgage-backed securities by about $95 billion a month, starting in May.

That's more than some investors expected and nearly double the pace the last time the Fed shrank its balance sheet. European shares wobbled after the open, with the CAC 40 in Paris up 0.2 per cent at 6,508.50 and Germany's DAX edging 0.1 per cent lower to 14,141.12. The FTSE 100 in London shed 0.3 per cent to 7,554.73. On Wall Street, the future for the S&P 500 was nearly unchanged. The future for the Dow Jones Industrial Average was 0.1 per cent lower. The S&P 500 fell 1 per cent on Wednesday, while the Dow lost 0.4 per cent. The tech-heavy Nasdaq lost 2.2 per cent.

In Asian trading, Tokyo's Nikkei 225 index lost 1.7 per cent to 26,888.57 while the Hang Seng in Hong Kong slipped 1.2 per cent to 21,808.98. The Shanghai composite index shed 1.4 per cent to 3,236.70. South Korea's Kospi declined 1.4 per cent to 2,695.86 and Australia's S&P/ASX 200 gave up 0.6 per cent to 7,442.80. Chinese markets declined despite state media reports that Premier Li Keqiang, the country's top economic official, promised support for the economy as it battles its worst corona virus outbreaks so far. Li told a meeting of the State Council, or Cabinet, that monetary policy would be used to "effectively support the real economy", Xinhua reported.

The State Council agreed to postpone required payments of pension insurance premiums on a time-limited basis for industries facing "special difficulty", and to channel unemployment insurance funds to help companies keep people on payrolls, it said. While China is contending with slumping growth, the US central bank is moving to cool inflation by reversing low interest rates and the extraordinary support it began providing for the economy two years ago when the pandemic knocked the economy into a recession.