Asian stock market continued to fall after U. S. after announcement of rate hike
2023.03.08 02:28
Asian stock market continued to fall after U. S. after announcement of rate hike
By Kristina Sobol
Budrigannews.com – After Federal Reserve Chair Jerome Powell warned that interest rates could rise more than anticipated, most Asian stocks experienced a sharp decline on Wednesday, with technology-heavy bourses suffering the most.
Regional stocks also suffered as a result of a decline in risk appetite and mixed trade data from China as well as a warning from China’s foreign minister about a possible rise in tensions between the United States and China.
After registering significant losses during the previous session, China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes experienced declines of 0.7% and 0.5%, respectively. While the nation posted a record exchange surplus the January-February period, a sharp drop in imports raised worries over a drowsy recuperation in neighborhood interest.
The Hang Seng index in Hong Kong was the worst performer of the day among technology-heavy bourses, losing 2.7%, while the KOSPI index in South Korea and the Taiwan Weighted index lost 0.6% and 1.4%, respectively.
Wall Street gave Asian markets a weak start, and as a result, Asian markets fell on Tuesday as a result of Powell’s remarks.
In a testimony that Powell gave to Congress, he said that the recent strength of inflation and the jobs market was likely to see rates rise above what the market expected, and he also raised the possibility of a more significant increase in March.
Following his remarks, the majority of traders now anticipate a 50-bps increase in March, up from earlier expectations of a 25-bps increase.
In overnight trade, Treasury yields also shot up, putting even more pressure on stock markets. Given that bonds provide steadier returns at a lower risk in such an environment, the prospect of rising interest rates bodes poorly for Asian stocks. This pattern battered local business sectors through 2022.
With the Fed’s Beige Book due later on Wednesday and a reading on nonfarm payrolls due on Friday, this week’s focus shifts to additional economic indicators.
Southeast Asian markets with a lot of risk also saw big losses, with the PSEi Composite in the Philippines losing 1.2% and the SET index in Thailand losing 0.9%, respectively.
Contrary to the trend, the Nikkei 225 in Japan rose 0.3 percent as a series of weak economic data supported bets that the Bank of Japan will maintain its ultra-accommodative policy this week.
In January, growth in average cash earnings declined, and Japan’s current account deficit widened more than anticipated.
In catch-up trade, major technology stocks weighed the most, with India’s Nifty 50 and BSE Sensex 30 falling 0.4% and 0.5%, respectively.
