Asian stocks sink as Fed fears batter tech, China concerns grow
Investing.com-- Most Asian stocks fell on Thursday after hawkish signals from the Federal Reserve spurred deep losses in technology stocks, while weak economic readings fueled more concerns over a Chinese economic slowdown.
Markets also took a weak lead-in from Wall Street indexes, which closed lower in overnight trade on renewed concerns over rising U.S. interest rates.
Tech-heavy Asian indexes logged the heaviest losses on Thursday, with Hong Kong’s Hang Seng index sliding 1.6%, while South Korea’s KOSPI shed 0.6%.
Futures for India’s Nifty 50 index also pointed to a softer open, likely on weakness in the country’s heavyweight tech stocks. Hotter-than-expected inflation readings also weighed.
The tech sector was hit by renewed fears of rising U.S. interest rates, after the minutes of the Fed’s July meeting showed that most policymakers supported higher interest rates to curb stubborn inflation.
The bank had hiked rates by 25 basis points in July, and flagged more potential hikes if U.S. inflation proved to be stubborn.
Strong inflation readings from the world’s largest economy had already put Asian tech on a downturn over the past three sessions, as the prospect of U.S. rates remaining higher-for-longer pressured the outlook for tech earnings.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.3% and 0.2%, respectively, extending losses into a fifth straight session as ratings agency Fitch flagged a potential risk to China’s sovereign rating.
The ratings agency told Bloomberg that any extension of government debt was likely to spark a reconsideration of China’s A+ rating. But while Fitch does not expect such a scenario to occur, the ratings agency also expects the government to provide little debt
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