- India and Canada expel top envoys in Sikh separatist killing row
- Mbappe says victim of 'fake news' after 'rape' report in Sweden
- Lebanon says 21 killed in strike on northern village
- Netanyahu vows no mercy after deadly Hezbollah drone strike
- Russia could be able to attack NATO by 2030: German intelligence
- EVs seek to regain sales momentum at Paris Motor Show
- Clarke backs Scotland to bounce back from 'tough' run
- Harris, Trump target crucial Pennsylvania as US vote looms
- NASA probe Europa Clipper lifts off for Jupiter's icy moon
- Lebanese Red Cross says 18 killed in strike in north
- Mendy borrowed money from Man City team-mates for legal fees
- Palestinian officials say Israeli forces kill two in West Bank
- Football leagues, unions file EU complaint against FIFA in calendar dispute
- Nigeria boycott AFCON qualifier in Libya after 'inhumane treatment'
- India to recall top envoy to Canada: foreign ministry
- Hezbollah, Israeli troops in 'violent clashes' after drone strike
- China insists won't renounce 'use of force' to take Taiwan as drills end
- Painkiller sale plan to US gives France major headache
- Italy begins landmark migrant transfers to Albania
- Russia jails French researcher for three years
- 'Unsustainable' housing crisis bedevils Spain's socialist govt
- Stocks shrug off China disappointment but oil slides
- New Zealand 4-0 up in America's Cup but British show signs of life
- Russian prosecutor demands 3 years prison for French researcher
- 'Innocent' British nerve agent victim caught in global murder plot: inquiry
- Afghan Taliban vow to implement media ban on images of living things
- Russian prosecutor demands 3 years, 3 months jail for French researcher
- England ready for Pakistan's spin assault in second Test
- New Zealand's Ravindra excited for India Tests with father in crowd
- India's capital bans fireworks to curb air pollution
- Stocks diverge, oil retreats as China disappoints markets
- FIFA to open 'global dialogue' on transfer system after Diarra ruling
- Trio wins economics Nobel for work on wealth inequality
- Starmer vows to cut red tape as he urges foreign investors to 'back' UK
- Ex-Stasi officer jailed over 1974 Berlin border killing
- 'Not viable': Barcelona turns against surging tourism
- Hezbollah says targeted Israeli naval base after deadly drone strike
- Rice praises 'unbelievable' England interim boss Carsley despite uncertainty
- Nepali teenager hailed as hero after climbing world's 8,000m peaks
- England captain Stokes back from injury for second Pakistan Test
- Shanghai stocks gain after stimulus briefing as markets rally
- Shanghai stocks gain after stimulus briefing as Asian markets rally
- South Korea military says 'fully ready' as drone flights anger North
- Pakistan 'vigilantes' behind rise in online blasphemy cases
- Nearly 90, but opera legend Kabaivanska is still calling tune
- Smith experiment as Test opener over, Green out of India series
- With inflation down, ECB eyes faster tempo of rate cuts
- Is life possible on a Jupiter moon? NASA goes to investigate
- Dodgers crush Mets 9-0 in MLB playoff series opener
- South Korea military says 'fully ready' as drone tensions soar
Markets struggle as recession fears weigh heavily
Equities struggled Wednesday after a brief respite from last week's painful rout across world markets, with recession fears continuing to build as central banks hike interest rates to combat decades-high inflation.
While Asia, Wall Street and Europe all enjoyed healthy gains on Tuesday, analysts warned the downbeat mood on trading floors means the selling is unlikely to end any time soon.
Fears about a global contraction have also put downward pressure on oil prices, despite China's reopening moves, the US holiday driving season and tight supplies.
Federal Reserve boss Jerome Powell's two-day testimony to Congress this week will be pored over for an idea about officials' plans for fighting runaway prices, which are being fanned by supply chain snarls, China's lockdowns and the war in Ukraine.
Most observers expect them to hike rates by three-quarters of a point several more times this year, having announced such a move in June -- the sharpest lift in almost 30 years.
However, while many believe the Fed's front-loaded tightening drive is needed -- allowing it to begin cutting sooner as price rises settle back -- there is a building consensus that the world's top economy is heading for a contraction next year.
"The Fed has entered into a policy cocktail that we would describe as hammer time," Gene Tannuzzo, at Columbia Threadneedle Investments, told Bloomberg Television.
"You have to be planning defensively at this point. There are a lot of questions on all risk assets."
- Crude prices drop -
In early Asian trade, Hong Kong, Singapore, Sydney, Seoul, Taipei, Jakarta and Manila all fell, while Tokyo and Shanghai were barely moved. There were small gains in Wellington.
Stephen Innes at SPI Asset Management said that while the selling from last week had abated, traders continued to fret over a recession and the prospect of more rate hikes, adding that the Fed could be more compelled to respond if oil prices surge again and push up inflation further.
"Even more worryingly from a policy perspective is that virtually every recession in the past three decades has been a function of a demand shock, but this is a supply shock; hence monetary policy is less potent," he added.
"Despite the uptick in risk sentiment, it still feels we are eons away from shaking the event-driven bear market blues due to prevailing recession obsession headwinds."
Oil prices were feeling the heat from recessionary fears, with both main contracts down more than three percent Wednesday, though Goldman Sachs said that with demand still outpacing supplies, the market remains tight.
"Investors should remember that Fed-induced slowdowns are simply a short-term abatement of the symptom, inflation, and not a cure for the problem, underinvestment," it added.
Bets on the Fed's rate hikes, and the Bank of Japan's refusal to move from its policy of ultra-low rates, continues to pile pressure on the yen, which is sitting at a 24-year low above 136.50 to the dollar.
Japanese Prime Minister Fumio Kishida's comment that it "is up to the central bank" how to maintain its easy money policy adding to pressure on the country's unit though famed economist Nouriel Roubini said he expects Tokyo to take action if the yen hits 140.
"If you go well above 140, the BoJ will have to change policy and the first change in policy is going to be yield curve control," he said referring to a policy of keeping long-term rates artificially at a chosen level.
"So I think another 10 percent fall in the yen will imply a change in policy," he told Bloomberg Television at the Qatar Economic Forum.
- Key figures at around 0230 GMT -
Tokyo - Nikkei 225: FLAT at 26,255.95 (break)
Hong Kong - Hang Seng Index: DOWN 0.6 percent at 21,424.70
Shanghai - Composite: FLAT at 3,307.00
Euro/dollar: DOWN at $1.0508 from $1.0535 late Tuesday
Pound/dollar: DOWN at $1.2238 from $1.2273
Euro/pound: UP at 85.87 pence from 85.80 pence
Dollar/yen: DOWN at 136.25 yen from 136.64 yen
West Texas Intermediate: DOWN 3.5 percent at $105.70 per barrel
Brent North Sea crude: DOWN 3.4 percent at $110.76 per barrel
New York - Dow: UP 2.2 percent at 30,530.25 (close)
London - FTSE 100: UP 0.4 percent at 7,152.05 (close)
H.E.Young--AMWN