Shares in the Asia-Pacific region traded lower on Wednesday, as economic fears continue to weigh on the market.
Among regional stock indexes, South Korea led losses, with the KOSPI falling 2.41%. In Hong Kong, the Hang Seng index fell 1.71%, and the mainland Shanghai Composite declined 0.95%. Japan’s Nikkei 225 slipped 0.37%, and the S&P/ASX 200 in Australia declined 0.23%.
Overnight on Wall Street, major indexes in the U.S. jumped after weeks of declines. The Dow Jones Industrial Average gained 2.15% to 30,530.25, and the S&P 500 gained 2.45%, at 3,764.79. The tech-focused Nasdaq Composite advanced 2.51% to 11,069.302.
Oil prices sank on Wednesday, as investors weighed escalating concern that the U.S. may be headed for a recession, while the Biden administration prepared to step up its fight against lofty pump prices by calling for a tax holiday on gasoline.
International benchmark Brent crude futures slipped 6.72% to $107.10 per barrel. U.S. crude futures dropped by 4.30% to $104.95 per barrel.
Reuters reported that U.S. President Joe Biden expected to call for a temporary suspension of the 18.4-cents a gallon federal tax on gasoline in a bid to bring down soaring energy costs.
Investors also concerned about the impact of higher US interest rates, as Fed Chair Jerome Powell is due to testify before Congress later today on his bid to curb inflation raging at the fastest pace in decades.
The safe haven dollar gained ground as investors turned nervous again about global growth prospects. The U.S. dollar index, which tracks the greenback against a basket of its peers, last traded at 104.787.
The yield on benchmark US 10-year Treasuries was fairly steady at 3.256.
Bitcoin continued to trade around $20,000 after falling as low as $17,592 last week.
Gold prices eased on Wednesday as the dollar firmed. Gold also on cautious note as it could be among assets that may be targeted in a possible next round of European Union sanctions on Russia, a draft document showed.
Spot gold dropped 0.4%, trading at $1,825.10 an ounce, extending losses to a fourth straight session. U.S. gold futures dropped 0.6% to $1,827.00.
Spot silver dipped 1% to $21.45 per ounce, platinum fell 0.7% to $930.91 and palladium dropped 0.8% to $1,862.40.
Stocks slipped across the board on Wednesday, failing to extend Wall Street's rally as persistent worries about interest rates and inflation remained a key focus for investors.
Investors are continuing to assess fresh cues from top central banks about their monetary policy plans, especially from the U.S. Fed.
Fed Chair Jerome Powell will appear before Congress on Wednesday, kicking off two days of testimony to the U.S. Senate Banking Committee for clues on future interest rate hikes and his latest views on the economy. A hawkish statement could see another bout of U.S. dollar strength as yields rise again.
On the data front in Europe, U.K. inflation hit 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country’s cost of living crisis. The elevated CPI figure would add further pressure on the BoE to keep raising rates as the country grapples with sky high inflation.
Wheat edged higher as the market recovered after touching the weakest levels since March in the last session, although pressure from early harvest in the U.S. and Europe limited gains, as well as additional pressure stemming from efforts to ship blocked grain cargoes in the Black Sea region. Ankara's military delegation will travel to Russia this week to discuss details of a possible safe sea corridor in the Black Sea to export Ukrainian grain, Turkish presidency sources said on Tuesday.