HONG KONG, May 10 — Asian equities mostly sank today and oil prices tumbled following a rout on Wall Street as anxieties were fanned over rising US interest rates, surging inflation and the impact of China’s prolonged Covid lockdowns.

Stock markets have been on a tempestuous ride this year, with Wall Street suffering another hit on Monday as the tech-rich Nasdaq slumped more than four per cent, while the S&P 500 ended below 4,000 points for the first time since March 2021. 

Steep declines in China’s April exports — due to Beijing’s staunch adherence to a zero-Covid policy that has placed millions under lockdown — and volatility in crude partly due to Russia’s war in Ukraine have also hastened selling.

“This rather precipitous drop in equity markets has been building for several months,” said Clifford Bennett, chief economist at ACY Securities.

“The fundamentals of war, inflation, rate hikes and supply-chain disruption are all individually significant headwinds. When combined, equity markets have no way through.”

US stock markets took a dive late last week after the Federal Reserve raised interest rates by a half-percentage point and flagged more aggressive hikes ahead to tackle decades-high inflation.

Stoking global inflationary pressures are lockdowns in dozens of locations across China — from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket province of Jilin — wreaking havoc on supply chains over recent months.

By this afternoon, the equities plunge in Asia had eased, and European stocks in Frankfurt, Paris and London rebounded as dip buyers sent markets rallying after the wreckage from yesterday’s rout. 

“For now, investors need to be prepared for continued volatility,” Solita Marcelli, Americas chief investment officer at UBS Global Wealth Management, wrote in a note, according to Bloomberg.

Tokyo today closed down 0.6 per cent, as Japanese traders fretted over US monetary tightening. Slumps seen in Seoul, Wellington, Singapore and Jakarta eased. 

“Risk markets remain on shaky ground,” said Stephen Innes of SPI Asset Management. 

Bitcoin woes

Bitcoin also slumped to as low as US$29,764 (RM130,410). The digital currency has lost more than half its value since a November surge saw it hit a record of nearly US$69,000.

Such a drastic drop in its value has not been seen since July 2021. 

Analysts say traditional investors tend to view bitcoin as a riskier asset and have been offloading it along with other digital tokens in response to growing fears of market volatility.

Crude — once considered a relative safe haven — also took a beating Monday when it plunged more than five per cent, with the European benchmark Brent North Sea crude dropping to US$106.77 per barrel, while the main US contract WTI was at US$103.87.

By today, the drop-off had eased — though crude was still lower, with Brent trading at around US$105.72 and WTI at US$102.97.

“There is nowhere to hide right now. If you are looking for green on the screen, it is very minimal, especially in the tech sector,” Victoria Greene, chief investment officer at G Squared Private Wealth, told Bloomberg.

Key figures at around 0730 GMT

Hong Kong — Hang Seng Index: DOWN 1.5 per cent at 19,705.51  

Shanghai — Composite: UP 1.1 per cent at 3,035.84 

London — FTSE 100: UP 0.7 per cent at 7,264.15

Tokyo — Nikkei 225: DOWN 0.6 per cent at 26,167.10 (close)

Brent North Sea crude: DOWN 0.2 per cent at US$105.72 per barrel

West Texas Intermediate: DOWN 0.1 per cent at US$102.97 per barrel

Euro/dollar: UP at US$1.0576 from US$1.0563 on Monday 

Pound/dollar: UP at US$1.2337 from US$1.2331

Euro/pound: UP at 85.72 pence from 85.64 pence

Dollar/yen: UP at 130.34 yen from 130.26 yen

New York — Dow: DOWN 2.0 per cent at 32,245.70 (close) — AFP