Asian Shares Give Up Early Gains On Growth Worries

Asian stocks gave up early gains to turn lower on Thursday amid worries that tightening global financial conditions will weigh on economic growth.

The dollar inched higher and Treasury yields were steady after notes from the Federal Reserve’s latest meeting showed broad support among Fed members to raise rates by a cumulative 100 basis points over the next two meetings to cool surging inflation.

China’s Shanghai Composite Index rose half a percent to 3,123.11 despite downbeat remarks on the economic outlook by Premier Li Keqiang.

Li gave his starkest warning yet about the economy, saying the economy is in some respects faring worse than in 2020, when the pandemic first emerged.

China will strive to achieve reasonable economic growth in the second quarter and stem rising unemployment, the official Xinhua news agency quoted Li as saying.

Hong Kong’s Hang Seng Index dropped 0.3 percent to 20,116.20 on concerns over a slowdown in growth due to prolonged Covid-19 curbs in China.

Japanese shares settled lower, with the Nikkei 225 Index ending down 0.3 percent at 26,604.84 amid a dearth of market-moving events. Advantest fell 3.6 percent and Mitsubishi Electric sank 4.2 percent, while SoftBank Group, Toyota Motor and Japan Airlines rose 1-2 percent.

Seoul stocks ended slightly lower as the country’s central bank hiked interest rates for a second consecutive meeting to wrestle consumer inflation down from 13-year highs.

The Kospi slipped 0.2 percent to close at 2,612.45, dragged down by chipmakers. Heavyweight Samsung Electronics dropped 0.8 percent, while peer SK Hynix slumped 4.6 percent to reach its lowest level in seven months.

Australian markets fell notably, with mining and retail stocks pacing the decliners. The benchmark S&P/ASX 200 Index dropped 0.69 percent to 7,105.90, while the broader All Ordinaries Index ended 0.7 percent lower at 7,339.30.

Rio Tinto gave up 1.1 percent and Fortescue Metals Group lost 3.7 percent after a drop in iron ore futures. Coal miner Whitehaven plunged 4.7 percent. Consumer-focused companies Woolworths, Coles and Wesfarmers declined 2-3 percent.

Software maker Appen soared 29.2 percent after it received a A$1.2 billion ($830 million) buyout approach from Canada’s Telus International.

New Zealand shares retreated after Reserve Bank Governor Adrian Orr said continuing with aggressive tightening is the best path for achieving its primary inflation and employment objectives. The benchmark NZX-50 Index closed 0.6 percent lower at 11,102.84.

U.S. stocks fluctuated on Wednesday before finishing mostly higher as the latest FOMC meeting minutes offered few surprises, with many officials advocating for the use of both interest rate increases and reductions in the size of the Fed’s balance sheet to achieve a neutral posture.

The Dow rose 0.6 percent, the S&P 500 gained 1 percent and the tech-heavy Nasdaq Composite jumped 1.5 percent.

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