Hong Kong (AFP) – Asian markets fought back on Wednesday to recoup some of the losses suffered earlier in the week as recession alarms continue to ring loudly and oil struggles to erase the previous day’s sharp drop amid growing fears of the request.

The euro has recovered slightly after hitting parity with the dollar for the first time in two decades, although it remains under pressure from growing concerns over an energy crisis in the euro zone and the slowing of monetary tightening by the Bank. Central European.

Traders are also awaiting the release of a series of key indicators this week, including the all-important Consumer Price Index later on Wednesday, with expectations for a further rise to a fresh 41-year high.

Another sharp price spike will bolster the Federal Reserve’s resolve to raise interest rates by 75 basis points for a second consecutive month in July, adding to concerns that officials could go too far and tip the economy into recession.

Still, Lauren Goodwin of New York Life Investments said policymakers are unlikely to abandon their hawkish tilt just yet.

“It’s generally expected to be a very strong impression,” she told Bloomberg Television.

“Even if it doesn’t, I don’t think that changes the Fed’s outlook in a few weeks. We won’t have enough evidence that inflation is picking up convincingly.”

In a further sign of the pressure felt around the world by soaring prices, South Korea’s central bank raised rates by 0.5 percentage points on Wednesday, the first such hike since 1999.

While European markets benefited from a rare gain thanks to bargain-basement buying, all three major Wall Street indices fell.

Asian stocks fluctuated, with Tokyo, Hong Kong, Seoul, Wellington and Taipei up slightly but Shanghai, Sydney, Singapore, Manila and Jakarta in the red.

Gas crisis in Europe

Stephen Innes of SPI Asset Management said stocks could continue to struggle due to a perfect storm of crises engulfing trading floors.

“Generally, stock markets can handle risk relatively well,” he said in a note. “But the current pattern of persistent inflation, rapid Fed tightening, upside/downside risks and excessive rate volatility, to name a few, has at times left investors defenseless.

“And with the market melting towards a bearish consensus, stocks are struggling to sustain a meaningful rally.”

Both major crude contracts were flat, remaining below $100 and far from recovering declines of more than 7% suffered on Tuesday, hit by bets on lower demand and fears of further Covid-19 shutdowns at Shanghai.

The commodity has lost much of the gains seen after Vladimir Putin invaded Ukraine, despite import bans from Russia, with some analysts saying consumers were simply choosing not to buy fuel in because of the high price.

Data from the American Petroleum Institute showed U.S. inventories rose by 4.76 million barrels last week, Bloomberg News reported citing people familiar with the numbers, indicating demand is slowing even during the driving season. key summer.

Joe Biden’s visit to Saudi Arabia on Friday will be watched closely as he tries to persuade the crude giant to pump more to help bring prices down.

In currency markets, the euro held just above $1.0 a day after hitting parity on Tuesday for the first time since late 2022, as the worsening energy crisis stoked expectations that the euro zone will plunge into recession.

As Russian energy giant Gazprom began 10 days of maintenance on its Nord Stream 1 gas pipeline on Monday, the bloc – and gas-dependent Germany in particular – is nervously waiting to see if the taps are reopened.

“A prolonged gas supply cut would halt much economic activity, sending (Germany) deep into recession,” National Australia Bank’s Tapas Strickland said.

He said July 21 – when the gas is expected to be restored – will be a crucial date.

“This date also happens to be the day of the next ECB meeting,” he added. “Either of these events are key risk events. Russia playing gas policy by not turning on the gas supply would likely see the euro fall much lower.”

Key figures around 02:50 GMT

Tokyo – Nikkei 225: 0.3% higher at 26,423.11 (pause)

Hong Kong – Hang Seng Index: UP 0.6% to 20,963.55

Shanghai – Composite: 0.3% down to 3,270.99%

Euro/dollar: DOWN to $1.0032 from $1.0037 on Tuesday

Pound/dollar: UP to $1.1893 from $1.1889

Euro/pound: DOWN to 84.34 pence vs. 84.40 pence

Dollar/yen: UP to 137.14 yen from 136.84 yen

West Texas Intermediate: FLAT at $95.80 a barrel

North Sea Brent: FLAT at $99.52 a barrel

New York – Dow: DOWN 0.6% to 30,981.33 (closing)

London – FTSE 100: UP 0.2% to 7,209.86 (closing)