Wall Street equities closed lower following comments from Federal Reserve officials that a recession is looming in the world's largest economy. Richmond Fed President Thomas Barkin said inflation was not really cooling off and the decline seen so far has been distorted by some falling goods prices, implying that the U.S. central bank could maintain higher interest rates for longer. Analysts also warned that the steepening of the inverted yield curve is an indicator of a potential recession in the U.S. Asian markets fell, with the MSCI's broadest index of Asia-Pacific shares outside Japan sliding 1.19%. Adding to the concerns in domestic equities was an uncertainty over the future trajectory of the Adani conglomerate, after financial index provider MSCI said it will cut the weightings of four group companies. Analysts have warned the move could lead to outflows and a further slide in value.
Most Adani group stocks extended their decline in Friday's
session. Among other stocks, Bajaj Finance gained 1%
after Jefferies hiked its investment on the company in its key
portfolios.
Investors will also await India's retail inflation data for
January, due on Monday. A Reuters poll of economists showed that
India's annual retail inflation rose from a 12-month low in
December, but stayed within the upper limit of RBI's tolerance
band of 6% in January.
($1 = 82.5250 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by
Janane Venkatraman and Nivedita Bhattacharjee)
