Asia Stocks Hit by Fed Fears, China Up on Strong Earnings Outlook

By Ambar Warrick

Investing.com– Most Asian stocks fell further on Tuesday as technology majors remained under pressure from new U.S. export curbs and a hawkish Federal Reserve, although Chinese indexes were supported by a couple of strong earnings forecasts.

The , which is heavily exposed to Chinese chipmaking stocks, slumped 4% to a near two-year low after the United States announced measures limiting their access to certain U.S.-made technology. The move points to more headwinds for Asian chipmakers and could also potentially worsen ties between the world’s two largest economies.

Hong Kong’s fell 1.7% with heavyweight technology stocks among the biggest weights. Majors Baidu (HK:), Alibaba (NYSE:) Group Holding Ltd (HK:), and Tencent Holdings Ltd (HK:) slipped between 2.6% and 5%.

Major Chinese semiconductor-linked stocks, including Anji Microelectronics Tech (SS:), tumbled over 10% and were the worst performers on the blue-chip index.

But China’s major stock indexes rose on Tuesday, propped up by a strong outlook from COSCO Shipping Holdings Co Ltd (SS:) and battery maker Contemporary Amperex Technology Co Ltd (SZ:), or CATL. The two stocks added 2.8% and 5.5%, respectively.

The shipping giant to shareholders for the nine months to Sept 30, citing improved freight rates. CATL, which supplies batteries to electric carmaker Tesla Inc (NASDAQ:), said it expects its on increasing demand for electric vehicles across the globe.

The two forecasts helped improve sentiment ahead of the third-quarter earnings season, even as China’s economic prospects appeared to be dimming. A resurgence in COVID-19 cases has investors fearing more lockdown measures ahead of the Communist Party’s 20th Congress later this week.

China’s index rose 0.5%, while the index added 0.4%. Focus this week is on local and for more cues on a potential recovery in the Chinese economy.

Broader Asian stocks marked deep losses. South Korea’s tech-exposed fell 2.4% and Japan’s slumped 2.7% in catch-up trade after a holiday on Monday.

Asian markets marked a weak start to the week, which was worsened by hawkish signals from on Monday.

Brainard said the central bank has no intentions of a dovish pivot in the near-term, and will only ease its hawkish stance when it is convinced inflation is on the lam.

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