Asian stocks slide as Hawkish Powell comments weigh
Asian stocks fell to their lowest in a week on Friday, while the dollar was firm as elevated Treasury yields weighed on sentiment after hawkish comments from US Fed Chair Jerome Powell extinguished expectations of a peak in interest rates.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1 percent to a one-week low of 486.39, while Japan’s Nikkei was 0.50 percent lower.
US Federal Reserve officials including Powell said on Thursday they are still not sure interest rates are high enough to finish the battle with inflation. The Fed is “committed to … monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time,” Powell said at an International Monetary Fund event.
“We are not confident that we have achieved such a stance.”
Powell’s comments along with a weak auction of $24 billion in 30-year Treasuries pushed yields higher, casting a shadow on equities and providing support to the dollar.
Europe markets open with losses
Europe’s major stock markets opened in the red on Friday, following news that the UK economy stalled in the third quarter.
London’s benchmark FTSE 100 index decreased 0.5 percent to 7,418.70 points, dented also by a profit warning from drinks giant Diageo.
In the eurozone, Frankfurt’s DAX index shed 0.3 percent to 15,305.07 points and the Paris CAC 40 lost 0.5 percent to 7,077.81.
Sentiment was also hit after Federal Reserve boss Jerome Powell warned he “will not hesitate” to hike US interest rates further in his quest to bring inflation to heel.
Hong Kong stocks sink
Hong Kong shares tumbled at Friday morning’s open after Federal Reserve boss Jerome Powell said he would not hesitate to hike interest rates further if inflation remained stubbornly high.
The Hang Seng Index dropped 0.92 percent, or 160.42 points, to 17,350.87.
The Shanghai Composite Index shed 0.32 percent, or 9.72 points, to 3,043.56, and the Shenzhen Composite Index on China’s second exchange dipped 0.44 percent, or 8.48 points, to 1,903.42.
Japan’s Nikkei slips on earnings drag
Japan’s Nikkei share average dropped on Friday, tracking overnight Wall Street losses following a hawkish tilt by US Federal Reserve Chair Jerome Powell, while heavyweight stocks SoftBank Group and Sony slumped after disappointing earnings.
The Nikkei dropped 1 percent to 32,319.51 as of 0200 GMT, with 160 of its 225 components declining, 63 rising and two trading flat.
The broader Topix slid 0.73 percent Overnight, the Fed chief said policymakers “are not confident” that policy is yet restrictive enough to tame inflation, helping to send 10-year US Treasury yields soaring as much as 13 basis points to 4.654 percent.
That led the dollar to surge as high as 151.39 yen , but without buoying the overall Japanese market.
“There really nothing of the ‘weaker yen means buy exporters on the boost to earnings,’” said Maki Sawada, a strategist at Nomura Securities.
Indian shares open lower
Indian shares opened lower on Friday, tracking a drop in global stocks, after US Federal Reserve Chair Jerome Powell said that the central bank is not confident that interest rates are high enough to tame inflation.
The NSE Nifty 50 index was down 0.26 percent at 19,342.20 as of 9:15 a.m. IST, while the S&P BSE Sensex fell 0.35 percent to 64,605.
Sri Lanka shares end lower
Sri Lankan shares closed lower on Thursday, dragged by losses in financial stocks.
The CSE All Share index settled down 0.4 percent at 10,889.48.
LOLC Holdings and Senkadagala Finance were the top losers on the CSE All Share, falling 2.17 percent and 11.33 percent, respectively.
Trading volume on the CSE All Share index fell to 36.7 million shares from 77.3 million shares in the previous session.
The equity market’s turnover rose to 2.39 billion Sri Lankan rupees ($7.31 million) from 1.82 billion rupees in the previous session, according to exchange data.
Australia shares hits three-week high
Australian shares hit a three-week high on Thursday, buoyed by the gains in financial stocks on bets the central bank was done with interest rate hikes for now, while National Australia Bank rose 1.7 percent after the lender reported higher annual cash profit.
The S&P/ASX 200 index rose 0.5 percent to 7,032.5 as at 0055 GMT, its highest level since Oct. 19. The benchmark rose 0.3 percent on Wednesday.
The Reserve Bank of Australia (RBA) lifted key rates to a more than 12-year high on Tuesday but said that going forward it would assess data more closely to decide if even more tightening was required.
Analysts at UOB said the RBA’s policy guidance in November was “dovish-sounding”, adding they expect the RBA to keep rates unchanged in December.
Banks rose 0.6 percent, with three out the “big four” banks advancing between 1 percent and 1.4 percent. Westpac was down 2.5 percent, as it was trading ex-dividend.
Saudi Arabia stocks lower
Saudi Arabia stocks were lower after the close on Thursday, as losses in the Agriculture & Food, Financial Services and Retail sectors led shares lower.
At the close in Saudi Arabia, the Tadawul All Share lost 0.81 percent.
Falling stocks outnumbered advancing ones on the Saudi Arabia Stock Exchange by 181 to 81 and 23 ended unchanged.
Crude oil for December delivery was up 0.82 percent or 0.62 to $75.95 a barrel. Elsewhere in commodities trading, Brent oil for delivery in January rose 0.80 percent or 0.64 to hit $80.18 a barrel, while the December Gold Futures contract fell 0.32 percent or 6.25 to trade at $1,951.55 a troy ounce.
EUR/SAR was down 0.21 percent to 4.01, while USD/SAR unchanged 0.01 percent to 3.75.
The US Dollar Index Futures was up 0.08 percent at 105.54.