Asian Shares Slide On Rate Hike Concerns
Asian stocks ended broadly lower on Friday, as investors weighed the implications of higher interest rates, surging coronavirus cases and heightened tensions between the U.S. and China.
Chinese shares ended sharply lower after the Biden administration said it is imposing new sanctions on several Chinese biotech and surveillance companies and government entities, citing national security and human rights issues.
The benchmark Shanghai Composite Index slumped 42.65 points, or 1.2 percent, to 3,632.36, while Hong Kong’s Hang Seng Index tumbled 282.87 points, or 1.2 percent, to 23, 192.63.
Japanese shares plunged as the Bank of Japan decided to scale back its pandemic-related funding measures, citing improving financial conditions in the country on the whole amid waning supply-side constraints.
The central bank decided to slow purchases of corporate bonds and commercial paper to pre-pandemic levels from April while maintaining ultra-loose policy and extending financial relief for small firms.
The Nikkei 225 Index dove 520.64 points, or 1.8 percent, to 28,545.68, with paper & pulp, railway & bus and real estate shares pacing the declines.
Meanwhile, Australian markets ended slightly higher as higher commodity prices helped lift miners and energy stocks.
The benchmark S&P/ASX 200 Index edged up 8.30 points, or 0.1 percent, to 7,304, snapping a three-session losing streak. The broader All Ordinaries index ended up 7.70 points, or 0.2 percent, at 7,626.20.
Origin Energy rallied 2.4 percent and Beach Energy added 2.8 percent after crude oil prices jumped overnight. Miners Fortescue Metals Group and BHP gained 1-2 percent on the back of strong iron ore prices.
Gold miners Northern Star Resources and Newcrest jumped 3-4 percent after a jump in bullion prices overnight. Buy-now-pay-later fir Afterpay slumped 7.6 percent after a U.S. agency sought data on business practices from five companies in the sector.
Seoul stocks rose for a third straight session amid easing uncertainty about the U.S. monetary policy. The Kospi climbed 11.32 points, or 0.4 percent, to 3,017.73, led by foreign and institutional buying. Heavyweight KB Financial Group and steelmaker POSCO both jumped around 3 percent.
New Zealand shares ended lower as expectations for higher interest rates weighed on low-growth yield-sensitive stocks. Disappointing business confidence data also dented sentiment.
The benchmark NZX-50 Index dropped 59.60 points, or 0.5 percent, to 12,717.94. Fisher & Paykel Healthcare, Ebos and Goodman Property Trust were among the prominent decliners.
U.S. stocks reversed early gains to end lower overnight as the latest batch of economic data disappointed and worries grew over travel rules to curb omicron’s spread.
Dr. Anthony Fauci, President Joe Biden’s top medical advisor, said that the U.S. is experiencing a resurgence of the delta variant and that omicron will become the dominant Covid-19 variant in the United States within a few weeks.
The tech-heavy Nasdaq Composite plummeted 2.5 percent as investors considered the impact of the Fed’s aggressive pace of interest rate increases. The S&P 500 shed 0.9 percent and the Dow finished marginally lower.
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