Asian stocks were pushed back on Thursday with investors worried about aggressive rate hikes in the US and rising tensions between Washington and Beijing after China was warned about aiding sanctions-hit Russia.
US Federal Reserve policymakers signalled on Wednesday they stand ready to take more aggressive action to bring down unacceptably high inflation, including a possible half-percentage-point interest rate hike at the next policy meeting in May.
That came at the same time the Biden administration was warning Beijing not to take advantage of business opportunities created by sanctions imposed on Russia over its invasion of Ukraine, or help Moscow evade export controls or process its banned financial transactions.
The United States will “absolutely” enforce export controls if Chinese companies send semiconductors to Russia that were made with US technology, a move that could “essentially shut them down.”
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China stocks closed lower with the blue-chip CSI300 index ending 0.6% down at 4,251.31, while Hong Kong’s Hang Seng Index fell 0.94%, or 208.13 points, to 21,945.95.
The Shanghai Composite Index dipped 0.63%, or 20.77 points, to 3,250.26, while the Shenzhen Composite Index on China’s second exchange lost 0.87%, or 18.86 points, to 2,144.34.
Chinese stocks rebounded from 21-month lows last week after the country’s top policymaker pledged to support the domestic economy and financial markets, though investors are waiting to see these supportive measures materialise.
The Covid-19 situation in the country continued to dent investor sentiment too, with China reporting 2,054 new confirmed coronavirus cases on March 23.
“Uncertainties like the Ukraine crisis and a hawkish Fed have not been eliminated, although China’s policy has reversed a downtrend in the market, the [rebound] process would be bumpy,” said Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co.
In the Hong Kong stock market, social media and gaming giant Tencent Holdings slumped nearly 6% after posting its slowest revenue growth since it went public in 2004, reflecting regulatory scrutiny that has hurt both its gaming business and advertising sales.
Shares of Weibo closed down 1.7%, while the Hang Seng Tech Index ended 3% lower. Meituan tumbled 5.9%.
China Developers Shares Fall
Mainland developers trading in Hong Kong dropped back as well with China Aoyuan and Kaisa Group falling 9.8% and 11.8%, respectively.
Sunac China plunged 16.7% as the developer plans to extend payment on a 4 billion yuan ($627.85m) onshore puttable bond and is in preliminary negotiations with large holders.
ZTE Corp also declined 9.2%, following a 23% jump on Wednesday after the telecommunications equipment maker completed five years of probation in the US.
Tokyo stocks, however, bucked the trend across the region closing higher on Thursday, after rebounding from earlier losses.
The benchmark Nikkei 225 index ended up 0.25%, or 70.23 points, at 28,110.39, while the broader Topix index rose 0.14%, or 2.86 points, to 1,981.56.
Indian stocks though retreated with Mumbai’s signature Nifty 50 index down 0.13%, or 22.90 points, to close at 17,222.75.
Key figures around 0820 GMT
Tokyo – Nikkei 225 > UP 0.3% at 28,110.39 (close)
Hong Kong – Hang Seng Index > DOWN 0.9% at 21,945.95 (close)
Shanghai – Composite > DOWN 0.6% at 3,250.26 (close)
Brent North Sea crude > DOWN 0.2% at $121.37 per barrel
West Texas Intermediate > DOWN 0.2% at $114.75 per barrel
New York – DOW > DOWN 1.3% at 34,358.50 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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