Asian stocks decline, with China leading losses. Rate jitters. Following a dismal start from Wall Street amid concerns over interest rate increases

Asia Pacific News Update and Wind Up

Asian stock markets slide following a dismal start from Wall Street amid concerns over interest rate increases

Due to concerns about increasing interest rates and sluggish economic development. Several Asian stock markets declined on Thursday, after a dismal lead-in from Wall Street. With losses of roughly 0.6% and 0.7%, each. China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indices were among the lowest losers during the day.

Even while the decision indicates increased liquidity assistance for local equities. The People’s Bank of China holding its benchmark lending rates at record lows had no impact on Chinese markets.

Although figures released early this week indicated that China’s economy expanded faster than anticipated in the Q1 of 2023. Consumer growth was mostly responsible for the expansion. An economic barometer in the nation, the manufacturing industry, failed to rebound from a COVID-caused downturn.

Hang Seng Index slides

Tesla Inc. (NASDAQ: TSLA), which fell 6% following the close as the company’s quarterly profit margin. Failed expectations amid an increasing pricing war. Followed by electric carmakers with Hong Kong and China-listed equities that also posted significant losses.

NIO Inc. (HK:9866) (NYSE: NIO), Li Auto Inc. (HK:2015) (NASDAQ: LI), and BYD Co. Ltd. (HK:1211) all saw losses of 1.2% to 5% on their Hong Kong-listed shares. While Contemporary Amperex Technology Co. Ltd. (SZ:300750), a significant supplier of batteries to Tesla, had a 2.5% decline in its Shenzhen-listed stocks.

Broader Asian markets fluctuated between flat and low. Australia’s ASX 200 index hardly changed, while Japan’s Nikkei 225 index increased by 0.1 percent.

Exports in Japan increased by 4.3% year over year in March, exceeding expectations by 2.6% and 7.3%, respectively.

The 2022/23 Japanese fiscal year’s trade deficit, which runs from April to March, reached an all-time peak of 21.7 trillion yen.

Data on the Japan trade balance for March 2023

Exports decreased by 0.8% monthly

1.2% m/m fewer imports

In Q1, Australian business confidence decreased to -4 from -1 before.

For the January to March 2023 quarter, the National Australia Bank – a quarterly business survey.

Business optimism is rated at -4.

Taiwan Semiconductor Manufacturing (TW:2330) (TSMC), the largest company on the index, traded down ahead of the release of its Q1 results later in the day. Leading to a 0.6% decline in the Taiwan Weighted Index. In contrast, shares of China’s Semiconductor Manufacturing International Corp (HK:0981). A significant rival of TSMC, soared 4.2% to a new top, contributing to slight increases in Hong Kong’s Hang Seng index.

Stronger data prints from the UK, and Europe adds to new rate increase concerns

 Strong inflation readings from the UK and Euro Zone confirmed predictions of more rate rises by the BoE and ECB.  Which negatively impacted sentiment toward regional markets. This was due in large part to growing worries about rising global interest rates.

Hawkish remarks by Federal Reserve members caused markets to reevaluate bets that the institution will stop raising interest rates as early as June. And that in turn led to a dismal overnight finish on Wall Street.

According to Fed Fund futures prices, there is an 85% likelihood that the Fed will increase interest rates by 25 basis points in May. A rising number of market players are also preparing for a similar increase in June.

Given that they reduce earnings from riskier assets, rising interest rates in developed nations are bad news for Asian markets. The amount of foreign money entering the region is also capped by tighter monetary constraints.

Crude oil declines as the dollar rises and demand worries increase

Thursday’s Asian morning trade saw a decline in oil prices as the U.S. dollar increased on predictions of rate hikes. And because fresh economic reports from the US and China did not sufficiently support hopes that demand will increase.

The price of Brent oil futures decreased by 80 cents or 0.96% to $82.32 a barrel. As of 03:02 GMT, the price of West Texas Intermediate crude (WTI) futures fell 69 cents, or 0.87 percent, to $78.47.

These benchmarks are at their lowest levels since OPEC+ announced its unexpected production reduction on April 2. After falling 2% on Wednesday, both benchmarks continue to slide for a second day.

According to the U.S. (EIA), the nation’s crude stocks decreased by 4.6 million barrels last week as refinery runs and exports grew. Yet gasoline stockpiles surprisingly increased due to weak demand. The American Petroleum Institute estimated late on Tuesday that the oil stocks drop would be 2.7 million barrels, but experts estimated just 1.1 million barrels.