Stock markets in Asia were unanimous on Monday. Fears that global central banks will rapidly raise interest rates to curb inflation weighed on sentiment. Tech stocks in particular, which rely on future growth, were among the losers.
For example, the loss of tech giant Samsung in South Korea was the leading indicator. Losses at tech companies also caused big minuses in Tokyo.
The Nikkei index in Japan closed with a loss of 3 percent at 26,987.44 points. A fall of more than 6 percent of tech investor Softbank weighed on the indicator, among other things. The yen also fell to its lowest level in 24 years. Japan’s accommodative monetary policy is increasingly at odds with interest rate hikes implemented by developed countries.
In South Korea, the Kospi lost more than 3 percent. Samsung, a heavyweight in the leading index, saw 2.5 percent of its stock market value evaporate. Trucker protests are also causing a nuisance in South Korea. Due to the strike by truck drivers out of dissatisfaction with the increased fuel prices, exports are at a standstill. Several companies have also had to shut down production. The country is a major exporter of cars, chips and electronics, among other things.
Tech stocks also suffered in Hong Kong. Tencent lost 5 percent and Alibaba had to make do with a loss of 7 percent. The Hang Seng index was down 3.5 percent in the meantime. In Shanghai, a minus of more than 1 percent was on the plates. Chip producer TSMC, in turn, lost 2.6 percent in Taiwan.
In the coming week, a lot of attention will be paid to the interest rate decision of the US Federal Reserve. Interest rates in the world’s largest economy may rise even faster, due to persistently high inflation.