Hong Kong - Asian markets fought Wednesday to recover some of the losses suffered at the start of the week as recession alarms continue to ring loud and oil struggled to erase the previous day’s sharp drop owing to growing demand fears.

The euro clawed its way back slightly after hitting parity with the dollar for the first time in two decades, though it remains under pressure from growing concerns about an energy crisis across the eurozone and the European Central Bank’s slower pace of monetary tightening. Traders are also awaiting the release of a series of key indicators this week, including the all-important consumer price index later Wednesday, with expectations for another increase to a fresh 41-year high.

Another big spike in prices will reinforce the Federal Reserve’s determination to lift interest rates 75 basis points for a second successive month in July, adding to concerns that officials could go too far and tip the economy into recession. Still, Lauren Goodwin of New York Life Investments said policymakers were unlikely to shift from their hawkish tilt for now. “This is widely expected to be a really strong print,” she told Bloomberg Television. “Even if it is not, I don’t think that changes the Fed’s perspective in a couple of weeks. We won’t have enough evidence that inflation is convincingly turning over.”

In a further sign of the pressure being felt around the world from surging prices, the South Korean central bank lifted rates 0.5 percentage points Wednesday, the first such increase since 1999. While European markets enjoyed a rare advance thanks to bargain-buying, all three main indexes on Wall Street dropped. Asian equities fluctuated, with Tokyo, Hong Kong, Seoul, Wellington and Taipei slightly higher but Shanghai, Sydney, Singapore, Manila and Jakarta in the red. Stephen Innes at SPI Asset Management said equities could continue to struggle owing to a perfect storm of crises engulfing trading floors.

“Typically, equity markets can deal with one risk relatively well,” he said in a note. “But the current setup of sticky inflation, rapid Fed tightening, growth/recession risks and excessive rates volatility, to name a few, have at times left investors defenceless. “And with the market coalescing to a bearish consensus, stocks are having trouble sustaining a meaningful rally.” Both main crude contracts were flat, staying below $100 and nowhere near recovering the more than seven percent drops suffered Tuesday.

The commodity has lost a large chunk of the gains seen after Vladimir Putin’s invasion of Ukraine, despite bans on imports from Russia, with some analysts saying consumers were simply choosing not to buy fuel because of the high price. Data from the American Petroleum Institute showed US stockpiles rose 4.76 million barrels last week, Bloomberg News reported citing people familiar with the figures, indicating demand slacking off even during the key summer driving season. Joe Biden’s visit to Saudi Arabia on Friday will be followed intently as he tries to persuade the crude giant to pump more to help reduce prices. On currency markets, the euro held just above $1.0 a day after hitting parity on Tuesday for the first time since late 2022, with a worsening energy crisis fanning expectations that the eurozone will plunge into recession.

With Russian energy giant Gazprom starting 10 days of maintenance Monday on its Nord Stream 1 pipeline, the bloc -- and particularly gas-reliant Germany -- is waiting nervously to see if the taps are turned back on. “A prolonged cut to the gas supply would halt a lot of economic activity, sending (Germany) deep into recession,” said Tapas Strickland at National Australia Bank. He said July 21 -- when the gas should be switched back on -- will be a crucial date. “That date also happens to be the day of the next ECB meeting,” he added. “Either of these events are key risk events. Russia playing gas politics by not switching on the gas supply would likely see the euro lurch much lower.”