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By Amber Warrick
Investing.com — Most Asian stock markets retreated on Thursday, tracking losses on Wall Street as worries about a U.S. recession grew, especially better-than-expected inflation data and the prospect of a pause in the Federal Reserve’s rate hike cycle.
Hong Kong’s Hang Seng index was among the day’s best performers, down 0.5% on a 3% decline. Ali Baba Group Holdings Ltd. (HK:9988) (NYSE: BABA ) plans to offload almost all of its stake in the e-commerce giant from Japanese investment giant Softbank Group Corp. (TIO:9984), according to a report.
Hong Kong’s tech heavyweights were reeling from losses this week after major Tencent (HK:0700) shareholder Process (AS:PRX) said it will sell more shares in the Internet giant.
Softbank shares were flat while the Nikkei 225 index traded sideways.
Regional economic readings have provided some positive signs. Chinese bourses pared earlier losses, with the Shanghai Shenzhen CSI 300 index now down 0.4%, while the Shanghai Composite was flat, as data showed the country’s exports unexpectedly rebounded in March.
India’s Nifty 50 and BSE Sensex 30 indices were flat on Wednesday after data on consumer inflation (CPI) fell more than expected in March, lending more credence to the Reserve Bank’s recent decision to end the rate hike cycle.
But minutes of the Federal Reserve’s March meeting suggested policymakers were concerned about a mild economic slowdown this year, with broader Asian markets trading in the flat-to-lower range. While the central bank may be able to pause the rate hike cycle in the near term, the ensuing slowdown in economic growth could be weak for risk-averse Asian markets.
Wall Street indexes ended in overnight losses as a cautious tone in the minutes offset somewhat positive inflation data.
US CPI inflation was weaker than expected in March, prompting bets on the Fed to pause in June. But core CPI, which excludes unchanged food and fuel prices, remained stubbornly steady, expected by a less hawkish Fed.
This uncertainty has made markets wary of risk-heavy assets, and has led to further inflows into safe-haven assets such as gold.
Philippine shares were down 1% in Southeast Asian markets, while Australia’s ASX 200 was down 0.3%.
Despite announcing a pause earlier this month, stronger-than-expected March labor force data fueled bets that the Reserve Bank of Australia may not yet act on raising interest rates.
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