SHANGHAI- Asian share markets slipped on Thursday after minutes from the Federal Reserve’s early May meeting showed a majority backing half-percentage-point rate hikes in June and July, and as persistent concerns over global growth sapped confidence.
While the minutes also highlighted policymakers’ faith in the strength of the US economy, helping lift the mood on Wall Street overnight, sentiment in equity markets remains fragile after weeks of volatile trade as more global central banks continue on the path of tightening.
“I don’t think the global economy is at the risk of a slowdown, I think we are slowing down.
And for that reason, the potential for good investments right now is predominately on the short side,” Barbara Ann Bernard, CIO of Wincrest Capital, a global long/short equity strategy hedge fund, told the Reuters Global Markets Forum.
South Korea’s central bank on Thursday raised interest rates for a second consecutive meeting as it grapples with consumer inflation at 13-year highs.
All participants at the Fed’s May 3-4 meeting supported a half-percentage-point rate increase – the first of that size in more than 20 years – and “most participants” judged that further hikes of that magnitude would “likely be appropriate” at the Fed’s policy meetings in June and July, according to minutes from the meeting
The minutes reflected agreement among policymakers on the strength of the US economy, tightness of the labor market and high inflation, with global supply problems, the Ukraine war, and continued coronavirus lockdowns in China skewing inflationary risks “to the upside”.
Lingering investor concern over those factors dragged MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.54 percent after trading higher early in the morning.
Chinese blue-chips fell 1.11 percent despite another drop in daily COVID-19 cases in the country, where lockdowns aimed at curbing the spread of the virus threaten to undermine recent economic support measures. – Reuters
