Asian Shares Retreat Ahead Of Powell's Testimony
(RTTNews) - Asian stocks fell broadly on Wednesday despite a jump in U.S. equities overnight. Inflation and interest-rate concerns took center stage ahead of congressional testimony by Federal Reserve Chair Jerome Powell.
Investors looked for further clues about whether there would be another 75-basis-point (bps) rate hike at the Fed's next meeting in July.
Chinese shares fell sharply, with healthcare stocks succumbing to selling pressure after reports emerged that Beijing is mulling a ban on sales of medicines on third-party e-commerce platforms.
The benchmark Shanghai Composite index dropped 1.20 percent to 3,267.20 while Hong Kong's Hang Seng index slumped 2.56 percent to close at 21,008.34.
Japanese shares ended slightly lower and the yen hit a fresh 24-year low against the dollar after minutes from the Bank of Japan's April policy meeting showed many board members stressed the need to maintain the central bank's massive stimulus program to support a still-fragile economy.
Finance Minister Shunichi Suzuki said on Tuesday he was concerned about the rapid yen weakening and would respond appropriately if necessary.
The Nikkei average fell 0.37 percent to 26,149.55 on recession worries while the broader Topix index ended 0.19 percent lower at 1,852.65. Tech stocks led losses, with Tokyo Electron tumbling 3.9 percent. Automakers saw broad-based gains, with Mitsubishi Motors climbing 7.1 percent.
SBI Holdings rose 2.8 percent on reports that Sumitomo Mitsui Financial Group is in final talks to buy a 10 percent stake in the financial conglomerate.
Seoul stocks plummeted deep into the red and the Korean won hit a 13-year low amid Fed rate hike fears. The Kospi average tumbled 2.74 percent to 2,342.81, dragged down by tech shares. Samsung Electronics fell 1.5 percent to a yearly low of 57,600 won and SK Hynix lost 3.2 percent.
Australian markets finished slightly lower, weighed down by technology and consumer discretionary stocks. Buy now pay later firm Zip Co, which is currently facing scrutiny in the U.K., plunged 11.4 percent.
The benchmark S&P/ASX 200 slipped 0.23 percent to 6,508.50 while the broader All Ordinaries index closed 0.28 percent lower at 6,682.30.
Across the Tasman, the benchmark S&P/NZX-50 index ended 0.21 percent lower at 10,678.67. Growth stocks were hit hard, with fleet management company Eroad falling 5.4 percent.
U.S. stocks rebounded on Tuesday as traders returned to their desks after a long holiday weekend.
The S&P 500 added 2.5 percent following the worst week since March 2020 and the Dow climbed 2.2 percent to post its best single-day gain since May 4 while the tech-heavy Nasdaq Composite surged 2.5 percent.