Asia-Pacific Markets Trading Lower, As Singapore Inflation Rises

On Tuesday, Asia-Pacific markets were trading lower, after the major indexes on Wall Street ended their worst day since June because of increasing rate hike worries.

Asian markets lower

The Hang Seng index in Hong Kong recorded a drop of 0.78% in the last hour of trading. There was a 0.404% drop in the Shenzhen Component to 12.455.15.

As for the Shanghai Composite, it ended the day slightly lower at 3,276.22. There was also a 1.19% drop in Japan’s Nikkei 225 index, which ended the session at 28,452.75.

There was also a 1.06% fall in the Topix, which ended the trading session at 1,971.44. The Kospi index of South Korea was down 1.1% to reach 2,435.34.

The Australian S&P/ASX 200 dropped 1.21% to reach 6,961.8.

Singapore’s inflation rises

The consumer price index in Singapore rose in July by 7% year-on-year, which is the highest number recorded in 14 years.

According to the Monetary Authority of Singapore (MAS), this is an increase from June, when the inflation number had stood at 6.7%.

The core inflation for July, which does not include private transport and accommodation, climbed 4.8% year-on-year, while it had stood at 4.4% in June.

According to the MAS and the Ministry of Trade and Industry, the uptick was primarily because of a higher increase in the prices of utilities and food.

The MAS said that global inflation was expected to stay high in the near term, as there are still supply constraints in key commodity markets.

Plus, a number of major economies also continue to see tight labor markets. As for Singapore, it said that core inflation was expected to stay high in the next few months before it eases by the year-end.

On Tuesday, the benchmark Straits Times Index had dropped 1%.

Wall Street

There was a more than 600-point drop in the Dow Jones Industrial Average overnight on Wall Street, which recorded its worst day after June.

The fears of the US Federal Reserve’s aggressive interest rate hikes returned to the markets once more and its summer rally came to an end.

There was also a 2% drop in the S&P 500. Risk appetite also saw a big hit, even though there was no such top-tier data revealed.

Market analysts said that investors were apprehensive about the speech of the US Federal Reserve’s chairman, Jerome Powell, in Jackson Hole Wyoming at the symposium scheduled on Friday.

Asian currencies

Market analysts said that a global slowdown has already been priced in by Asian currencies and this could see the Singaporean dollar benefit if the economy can avoid a hard landing.

They said that Asian currencies might experience some relief, after having moved quite a lot. As far as the Sing dollar is concerned, the country’s central bank has used it for addressing inflation.

This means that investors do not need to worry about the fundamentals of the economy of the Southeast Asian nation.

The Singaporean dollar was the last trading against the US dollar at a value of 1.397.

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