On Thursday, one of the last trading days of the year, worries about the spread of Covid-19 from China led to declines in European stocks and equities throughout Asia.
On a light trading day on Thursday, futures contracts for the Euro Stoxx 50 index fell along with equity benchmarks in Japan, China, Australia, and South Korea. The hardest hit stocks were Hong Kong tech stocks. After the S&P 500 index fell 1.2% to its lowest point in more than a month, contracts for the index fluctuated.
The yield on 10-year New Zealand government bonds increased. In contrast, the yield on 10-year Treasury bonds increased in the previous session but stabilized.
The news that the US would require arriving airline passengers from China to demonstrate a negative COVID-19 test before entry dwindled risk appetite. Most passengers on two flights from China to Milan were found to have the virus.
After a brutal year for the financial markets, the sentiment was dampened in the final trading week of 2022 by the possibility of additional pandemic disruption to fragile supply chains as central banks struggle to control inflation. A global bond index has fallen 16%, and global stocks have lost a fifth of their value, the biggest annual loss since 2008. The dollar value has increased by 7%.
In a further loosening of its last significant COVID regulations, Hong Kong lifted restrictions on gatherings and testing for travelers. This boosted the global economy but raised concerns that it would exacerbate inflation pressures and lead US policymakers to maintain tight monetary conditions.
Rate Hikes Pressure The Housing Market
Data made public on Wednesday demonstrated that the housing market has suffered due to the Federal Reserve’s rash of tightening measures. US pending home sales decreased in November for the sixth consecutive month, reaching their second-lowest level ever. Since the beginning of the year, borrowing costs have roughly doubled, and home sales have been falling for months. Investors weighed the effects of a Russian export ban on buyers who adhere to a price cap as oil prices fell amid low liquidity.
