Top news influencing ASX by the week ending 28 January 2022

For the last five days, the ASX 200 index has lost around 2.55%. However, on Friday, 28 January 2022, the ASX 200 closed sharply with a growth of 2.19% to 6,988.10.  Most indices have bounced back strongly with a considerable jump in their index value.

Not only ASX stock markets worldwide traded in the red zone this week. This article will look at the top five reasons that impacted the ASX this week.

US Federal Reserve Indicates rise in interest rate:

Like many other stock markets around the world, the ASX also witnessed a drop in the index after US Federal Reserve updated an increase in the interest rate. This week, Fed chair Jerome Powell said that the Central Bank plans to increase the interest rate in its March 2022 meeting.

The Rise in the COVID Cases:

Countries around the world have seen a significant increase in the spread of COVID-19. As per the World Health Organization (WHO), there have been 360,578,392 confirmed COVID-19 cases worldwide, including 5,620,865 deaths. At the same time, WHO updated that a total of 9,679,721,754 vaccine doses have been administered by 25 January 2022 In Australia, there are 372,827 COVID active cases.

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Tension along the Russia-Ukraine border:

Another probable reason for weak market performance could be the rise in tension along the Russia and Ukraine border. In recent weeks, Ukraine gained huge geopolitical attention as Russian troops built-up along its eastern border. Also, the demands from the Kremlin caused the threat of sanctions by the West & military placement by NATO partners.

The influence of the tension between Russia & Ukraine was evident across most stock exchanges globally. The biggest impact of this tension was on the mining sector as Russia is the key supplier of nickel, platinum group of metals, oil & gas, aluminum, and coal. Other than this, Russia is also amongst the major producers of wheat and grain. Ukraine is also one of the major players in this space.

Consumer Price Index:

On 25 January 2022, the Australian Bureau of Statistics released an announcement where it reported an increase of 1.3% in the consumer price index (CPI). Over the past 12 months to December 2021 quarter, CPI grew 3.5%. There was significant growth in the prices for New dwelling purchases by owner-occupiers and Automotive fuel by 4.2% and 6.6%, respectively.

Weak Wall Street Performance:

The ASX 200 was also impacted by the weak Wall Street Performance this week. NASDAQ Composite dropped over 3.6% in the past one week. Big players like Netflix dropped significantly this week after the tech giant fell short of market prediction for new subscribers at the closure of 2021. Players such as Walt Disney, ViacomCBS, and Roku also dropped significantly as these players invested heavily in streaming. Tesla also noted a significant drop in its stock price.

Other indices like S&P 500 and Dow Jones closed in the red zone this week.

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