© Reuters.
biedexmarkets.com– Most Asian stocks fell sharply on Friday as hotter-than-expected U.S. inflation readings spurred more concerns over higher-for-longer interest rates, with a barrage of upcoming central bank meetings coming squarely into focus.
Regional markets took a weak lead-in from Wall Street as inflation rose more than expected in February. The reading, which came on the heels of a strong consumer inflation print earlier this week, saw traders reduce their expectations for a rate cut in June.
Wall Street futures fell slightly in Asian trade, as markets grew fearful of any more hawkish signals from a next week.
Japanese stocks under pressure as BOJ meeting looms
Japan’s index fell 0.3% on Friday and was set for a 2.3% weekly decline, as investors continued to lock-in profits from record highs hit last week. The rose 0.6%, but was set to lose nearly 2% this week.
Focus was now squarely on a next week, where the central bank is widely expected to signal, or even enact an end to its negative interest rates and yield curve control policies.
Bets on a BOJ pivot were spurred chiefly by signs of sticky Japanese inflation, while the results of countrywide wage negotiations pointed to substantial increases in wages this year- a trend that is also expected to underpin inflation.
Australian stocks sink, RBA seen maintaining hawkish course
Australia’s slid 1% amid heavy profit-taking after hitting a record high earlier in the week.
Profit-takers swept in ahead of a Reserve Bank of Australia meeting next week, where the central bank is widely expected to maintain its hawkish course as inflation remained above its 2% annual target.
Analysts at ANZ said they expected the RBA to only turn neutral on policy by May, and that the bank is likely to maintain a “mild tightening bias” next week.
Tech losses, China jitters weigh
Broader Asian markets also retreated, weighed by a mix of losses in technology stocks and as weak data from China continued to trickle in.
China’s and indexes fell 0.7% and 0.3%, respectively, coming further off four-month highs as weak data for February showed little relief for the country’s beleaguered property sector.
Losses in mainland stocks and heavyweight tech dragged Hong Kong’s down 2%. WuXi Biologics (HK:) and WuXi AppTec (HK:) were the top decliners on the index, amid persistent concerns over U.S. sanctions against Chinese biotechnology firms.
Losses in tech pulled South Korea’s down 1.4%. for India’s index pointed to a mildly positive open, after the index was slammed by a heavy dose of profit-taking earlier this week.
Apple Inc (NASDAQ:) supplier Foxconn, formally known as Hon Hai Precision Industry Co Ltd (TW:), was a key outlier among Asian tech stocks on Friday. The contract electronics maker clocked a 33% spike in its fourth quarter profit, and said it expected to benefit greatly from increased demand for server technology from the artificial intelligence industry.
Foxconn’s shares rallied as much as 9% to an over five-year high.