HONG KONG, Aug 31, 2022 (BSS/AFP) - Stock markets resumed their downward
trend Wednesday, with traders fearing the Federal Reserve's determination to
beat inflation with higher interest rates will tip the world's top economy
into recession.

After bouncing from their June lows, global equities are once again taking a
hiding from worried investors after Fed chief Jerome Powell warned last week
the bank would need to tighten policy much more to succeed in its battle
against prices.

Wall Street's three main indexes fell for a third straight day Tuesday to sit
at a one-month low, with healthy data on US consumer sentiment and job
openings indicating the economy remained resilient despite recent rate hikes
and four-decade high inflation.

But analysts said the readings were a case of good news being bad news as
they would allow the Fed to stick to its plan of lifting borrowing costs
further. Expectations are growing for a third successive three-quarter-point
increase next month.

Traders are now awaiting the release of US jobs creation figures on Friday
for a better idea about the state of the economy.

But commentators said trying to plot a course through the next few months
would be tricky owing to inflation and rate increases as well as other issues
such as the Ukraine war, geopolitical tensions and China's Covid-damaged
economy.

"What's clear is that predicting this market is not clean cut," Angeline
Newman, of UBS Global Wealth Management, told Bloomberg Television.

"We are living in a world where conflicting economic signals are making the
path of monetary policy very difficult to determine."

Hong Kong and Shanghai-led Asian markets opened lower after a report on
Chinese factory activity showed another contraction, as the sector was
buffeted by lockdowns due to Beijing's zero-Covid strategy and high
temperatures that led to energy rationing.

The reading reinforced the view that the world's number two economy continued
to struggle.

There were also big losses in Tokyo, Seoul, Singapore, Manila and Jakarta.

Worries about an economic slowdown and the possible hit to demand were also
dragging on oil, which was on course for a third monthly drop, with both main
contracts tumbling more than five percent Tuesday.

However, while they remain wedged below $100 a barrel, market-watchers
pointed out the commodity had plenty of upside potential as investors grapple
with a range of supply issues including unrest in Libya and Iraq and
expectations that Iran nuclear talks will not end anytime soon.

Adding to the upward pressure was news that Russian energy giant Gazprom
intends to shut off gas deliveries for three days from Wednesday via the Nord
Stream pipeline through Germany.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.6 percent at 28,039.91 (break)

Hong Kong - Hang Seng Index: DOWN 1.3 percent at 19,684.90

Shanghai - Composite: DOWN 0.7 percent at 3,203.54

Euro/dollar: DOWN at $1.0021 from $1.0024 on Tuesday

Pound/dollar: UP at $1.1666 from $1.1661

Euro/pound: DOWN at 85.91 pence from 85.95 pence

Dollar/yen: DOWN at 138.54 yen from 138.66 yen

West Texas Intermediate: UP 0.7 percent at $92.26 per barrel

Brent North Sea crude: UP 0.5 percent at $99.85 per barrel

New York - Dow: DOWN 1.0 percent at 31,790.87 (close)

London - FTSE 100: DOWN 0.9 percent at 7,361.63 (close)