Markets mixed as era of cheap cash draws to a close

Asian and European markets mixed Tuesday in cautious trade as investors grew increasingly concerned about the Federal Reserve’s plans to wind back its financial support measures and lift interest rates within months.

While the fast-spreading Omicron coronavirus variant plays on nerves, traders are now coming to terms with the imminent end to the pandemic era of ultra-cheap cash, which helped the economic recovery and fanned a global rally for nearly two years, AFP reported.

The prospect of higher rates has rattled US markets at the start of the year. The Nasdaq is already down more than four percent as tech firms are more susceptible owing to their reliance on debt to drive growth.

While the tech-heavy index inched up slightly Monday, the S&P 500 and Dow closed in the red, though late dip-buying helped them recover from early steep losses.

Asia also suffered, with Tokyo returning from a long weekend break to end lower, while Shanghai, Sydney, Manila Wellington and Jakarta also slipped.

Singapore, Taipei, Mumbai and Bangkok rose while Hong Kong and Seoul were flat.

London, Paris and Frankfurt rose in early business.

Tokyo – Nikkei 225: DOWN 0.9 percent at 28,222.48 (close)

Hong Kong – Hang Seng Index: FLAT at 23,739.06 (close)

Shanghai – Composite: DOWN 0.7 percent at 3,567.44 (close)

London – FTSE 100: UP 0.6 percent at 7,487.64

Dollar/yen: UP at 115.27 yen from 115.20 yen late Monday

Euro/dollar: UP at $1.1344 from $1.1337

Pound/dollar: UP at $1.3613 from $1.3575

Euro/pound: DOWN at 83.33 pence from 83.42 pence

West Texas Intermediate: UP 1.0 percent at $79.00 per barrel

Brent North Sea crude: UP 0.9 percent at $81.57 per barrel

New York – DOW: DOWN 0.5 percent at 36,068.87 (close)