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By Amber Warrick
Investing.com — Most Asian stock markets fell on Wednesday, tracking overnight losses on Wall Street, with technology-heavy indexes suffering the biggest losses as the Federal Reserve showed caution ahead of minutes of its February meeting.
Japan’s Nikkei 225, Taiwan’s benchmark and South Korea’s KOSPI were the best performers, gaining between 0.8% and 1.4%. Tech-heavy indexes bore the brunt of the selloff as U.S. Treasury yields rose late Wednesday, awaiting Fed minutes.
Wall Street indexes also retreated overnight, with the Nasdaq composite leading losses among its peers.
The Fed’s minutes are widely expected to reiterate the central bank’s rhetoric, which is expected to carry more weight in terms of inflation expectations in January.
Higher interest rates will limit liquidity conditions and make Asian stocks weaker. Regional markets are expected to suffer from risk exposure, especially as traders are wary of the US recession.
Risk-heavy Southeast Asian stocks fell sharply on Wednesday, with bourses in the Philippines and Indonesia each losing more than 1%.
Stronger-than-expected US PMI data showed the world’s largest economy has yet to see a slowdown. The strong reading gives the Fed more economic leverage to raise interest rates.
The US Personal Consumption Expenditure Index – the Fed’s preferred measure of inflation – is also due this week, and inflation is expected to repeat that it was stuck in January.
The threat to the Fed this year leaves some optimism in China’s economic recovery, which is expected to benefit Asian markets. But even as the country relaxed most of its anti-COVID measures earlier this year, the country’s initial readings indicate a rapid recovery.
China’s Shanghai-Shenzhen CSI 300 and Shanghai Composite indices fell 0.6% and 0.3% respectively.
Hong Kong’s Hang Seng index was the only gainer among Asian markets, with HSBC Holdings PLC (HK:0005) gaining modestly. The bank’s shares rose more than 4 percent after reporting strong fourth-quarter earnings.
Sentiment for Hong Kong was helped somewhat by data showing the city’s economy was slightly weaker than expected in the fourth quarter.
Australia’s ASX 200 index fell 0.5%, as strong wage growth data showed some resilience in the labor market, giving the Reserve Bank more headroom to keep raising rates.
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