Asian stocks tumbled on Wednesday as hawkish comments from Fed Chair Jerome Powell on the first day of his semiannual two-day testimony before Congress stoked concerns about interest rates being hiked by 50 basis points at the March FOMC meeting.
Resilient U.S. economic data since start of this year has raised the possibility of the U.S. central bank returning to large rate hikes, Powell acknowledged.
According to CME’s FedWatch tool, markets now price in an almost 70 percent chance of a 50-basis point rate hike at the Fed’s March 21-22 policy meeting.
Most Asian currencies sank amid the broad dollar strength, as focus shifted to the release of the U.S. nonfarm payrolls report later in the week and next week’s inflation figures.
Gold prices extended their fall, while oil steadied after suffering heaving losses in the overnight session.
China’s Shanghai Composite Index fluctuated before finishing marginally lower. Hong Kong’s tech-heavy Hang Seng Index tumbled 2.4 percent to close at 20,051.25.
Japanese shares rose for a fourth straight session to reach a 3-1/2-month high as a weakening yen buoyed the outlook for exporters. Retailers also posted strong gains on optimism over demand from Chinese travelers after Japan eased its coronavirus border measures.
The Nikkei 225 Index rose 0.5 percent to 28,444.19, while the broader Topix ended 0.3 percent higher at 2,051.21.
Mazda Motor jumped 3 percent as the yen hit a nearly three-month low at 137.90 to the greenback.
Fast Retailing, Front Retailing, Takashimaya and Isetan Mitsukoshi Holdings rallied 2-4 percent. Nissan Motor fell 3.5 percent after a rating cut by S&P to junk status.
Seoul stocks fell sharply to snap a five-day winning streak on U.S. rate hike fears. The Kospi closed 1.3 percent lower at 2,431.91, dragged down by large-cap tech heavyweights.
Australian markets ended lower, with tech, mining and energy stocks pacing the decliners. The benchmark S&P/ASX 200 Index dropped 56.90 points, or 0.8 percent, to 7,307.80, while the broader All Ordinaries Index ended 0.8 percent lower at 7,503.90.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended down 0.5 percent at 11,855.54.
U.S. stocks tumbled overnight after Powell told lawmakers the U.S. central bank would be prepared to reaccelerate the pace of rate hikes if the economy grows too quickly.
The Dow lost 1.7 percent, the tech-heavy Nasdaq Composite shed 1.3 percent and the S&P 500 gave up 1.5 percent.
Source: Read Full Article