Aggressive Rate Hike Worries Dragged Asian Markets Lower

Arjun Pandit
17 Feb, 2023
Mumbai

Asian markets fell across the region on the worries of higher U.S. interest rates inflicting another round of currency devaluation in the region.  

Benchmark indexes fell after two U.S. Federal Reserve officials called for strong rate hikes at the next policy meetings in March after wholesale inflation and retail sales were ahead of expectations. 

Loretta Mester and James Bullard supported the case for a larger rate increase of 50 basis points. 

Stocks in Japan closed lower on the uncertainties about the future direction of the Bank of Japan's yield curve control policy. 

Softbank led the decliners after tech stocks faced renewed selling following the prospect of larger increases in interest rates in the U.S. 

Mainland China and Hong Kong stocks declined on the weakness in tech stocks and home builders. 

For the week, the Nikkei edged down 0.6%, the Shanghai Composite declined 1.1%, the Hang Seng index dropped 2.2% and the Nifty and the Sensex indexes rose 0.6%. 

 

China's New Home Prices Extend Losses to 9th Month 

New home prices in China declined for the ninth month in a row after buyers stayed away from new purchases, the National Bureau of Statistics reported Friday. 

The average price of a new home in 70 large and medium sized cities declined 1.5% from a year ago in January, matching the rate in December. 

Home prices in January increased 0.1% from the previous month, the first rise in a year. 

 

Singapore's International Trade Shrank On Weak Global Demands

Singapore's non-oil exports declined for the fourth month in a row in January, Enterprise Singapore said in a report Friday. 

Non-oil exports declined 25% in January, larger than the 20.6% fall in November, the government data showed. 

Exports declined 9.3% and imports fell 11.7% in January, resulting in a 10.4% decline in total international trade. volume.    

 

Asian Markets Review 

The Nikkei 225 index fell 0.7% to 27,513.13 and the yen declined to 134.18 against the U.S. dollar. 

The Shanghai Composite index fell 0.7% to 3,224.02 and the Hang Seng index declined 1.3% to 20,719.81. 

The Sensex index decreased 0.5% or 316.94 points to 20,719.81 and the Nifty index declined 0.5% or 91.65 to 17,944.20. 

The Indian rupee weakened to 82.72 against the U.S. dollar and the yield on 10-year Indian government bonds traded near 7.34%. 

 

Asia Movers 

Tech stocks led the decliners in Tokyo trading. 

Advantest Corp fell 1.7% to ¥10,050.0, Tokyo Electron Ltd declined 1.7% to  ¥46,190.0 and Screen Holdings dropped 1.7% to ¥10,290.0. 

China Renaissance Holdings Ltd plunged 28% after the company said it is not able to contact its chief executive office and the controlling shareholder Bao Fan. 

Samsung Electronics, LG Energy Solution and Samsung SDI fell between 2% and 4%. after the Kospi index in Seoul decreased 1% to 2,451.21. 

Adani Enterprises Ltd declined 4.5% to ₹1,719.0 and extended year-to-date losses by 55% following a negative report from the U.S.-based short seller Hindenburg Research.