Economy: concern spreads to world stock markets over the announced rise in interest rates in the United States

The Shanghai Stock Exchange in China.

(File image).

REUTERS/Aly Song

Text by: RFI Follow

2 mins

World stock markets fell on Monday, June 13, fearing sharp increases in interest rates in the United States and a recession.

Inflation in the United States, monetary tightening by central banks and the health situation in China are worrying the financial markets. 

Advertising

Read more

The stock markets were down on Monday morning, first in Asia then in Europe, in fear that the FED would decide to raise its key rates sharply in order to control inflation which, in the United States,

a new record.

The announcement of this figure has already caused heavy losses on the New York Stock Exchange on Friday. 

All eyes are on the US Federal Reserve, which is meeting Tuesday and Wednesday.

While the 50 basis point rate hike appears to be a given, markets are worried about a steeper rate hike that could go as high as 75 basis points.

More aggressive monetary tightening is in turn fueling fears that the world's largest economy will enter recession next year.

Similarly, the new

reimposed by the Chinese authorities, shortly after lifting them, are creating new fears about the world's second largest economy.

Yen and rupee at low

Fears of more aggressive monetary tightening from the Fed weighed on currencies other than the dollar.

This Monday morning, the yen was trading at 134.47 yen per dollar, down 0.17%.

The Indian rupee plunged to an all-time low on Monday, trading at 78.07 rupees to the dollar.

The euro lost 0.40% to 1.0477 dollars.

The surge in interest rates penalized “tech” stocks, which need to issue debt to finance their growth.

The Chinese tech giants were not spared: -7.20% for Baidu, -7.98% for Alibaba, -4.89% for Tencent in Hong Kong.

Finally, the possibility of new confinements in the largest Chinese cities was dragging down oil prices.

(

)

Newsletter

Receive all the international news directly in your mailbox

I subscribe

Follow all the international news by downloading the RFI application

google-play-badge_FR

• Economy