Asia Equities Open Lower as Markets Focus on Interest Rates
Asia saw a decline in shares on Tuesday as investors turned their attention towards the prospect of sustained high global interest rates. Hong Kong’s Hang Seng index fell 2.8%, while Japan’s Topix shed 1.1%. Markets in mainland China and South Korea were closed for public holidays.
What to Watch in Asia Today
Tuesday will see the Reserve Bank of Australia make an interest rate decision. Economists predict that the cash rate will remain at 4.1%, an 11-year high. Additionally, shares in troubled property developer China Evergrande are set to resume trading on the Hong Kong stock exchange. Last Thursday, trading was suspended after Evergrande’s billionaire chair, Hui Ka Yan, faced unspecified “mandatory measures” for suspicion of “illegal crimes.” Financial markets in South Korea are closed for National Foundation Day, a holiday celebrating the creation of the first Korean state.
WeWork Skips Interest Payments to Lure Landlords to the Negotiating Table
Office space provider WeWork revealed on Monday that it had skipped $95 million of interest payments as it looks to renegotiate its financial obligations. The company, which is heavily indebted and on the brink of bankruptcy, hopes that missing the payments will allow for discussions with its stakeholders. WeWork is primarily focused on reducing its lease costs, which it claims are significantly higher than current market conditions.
UN Security Council Approves Mission to Tackle Haitian Gangs
The UN Security Council has authorized a security mission to combat gangs in Haiti after a year of deadlock on the issue. China and Russia abstained from the vote, while the other 13 member countries voted in favor. Kenya has pledged to lead the mission with 1,000 police officers, and several Caribbean nations have also promised their support. The US will support the mission but will not send troops. Haiti is facing a dire security situation, with numerous gangs controlling large sections of cities and engaging in regular kidnappings for ransom.
EU Nominee for Climate Chief Proposes Global Fossil Fuel Taxes
Wopke Hoekstra, the EU nominee for climate chief, has suggested the implementation of global taxes on fossil fuels, including those used in the airline and shipping industries. The revenue generated from these taxes would be used to support developing countries suffering from carbon pollution. Currently, international agreements exempt global transport from fuel taxes, although the EU emissions trading scheme does cover aviation and will extend to shipping next year.
Oil Prices Hit 3-Week Low on Concerns Over High Interest Rates
Oil prices dropped to their lowest level in three weeks due to concerns that sustained high interest rates could impact the economy and reduce demand for fuel. Brent crude fell 1.6% to $90.71 per barrel, while US crude settled 2.2% lower at $88.82. This decline in oil prices reverses the upward trend seen since June, driven by coordinated production cuts by Saudi Arabia and Russia.
US Stocks End Higher as Big Tech Rally Lifts S&P 500
After a turbulent trading session dominated by a bond market sell-off, US stocks closed higher. The S&P 500 staged a late recovery to finish slightly higher, with the energy and utility sectors being the worst-performing. The tech-heavy Nasdaq Composite saw a 0.7% increase, thanks to gains in the “Magnificent Seven” Big Tech stocks. Tesla experienced a late recovery, pushing the electric vehicle maker’s shares into positive territory.
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