Asian Shares Slip On Hawkish Fed, China COVID Concerns

(RTTNews) - Asian stocks followed Wall Street lower on Thursday, as investors reacted to hawkish comments from Fed Chair Jerome Powell on the outlook for inflation and rates, and China's affirmation that a zero-tolerance approach continues to be the overall strategy in tackling COVID-19.

China's Shanghai Composite index slipped 0.19 percent to 2,997.81 as China once again imposed lockdown in several cities across the country and also ramped up COVID restrictions to fight a surge in fresh cases.

Hong Kong's Hang Seng index slumped 3.08 percent to 15,339.49 as a private survey showed that China's services sector shrank more than expected in October.

The Hong Kong Monetary Authority today raised its base rate by 75 basis points to keep pace with the Fed rate hike.

Japanese markets were closed on account of Culture Day holiday. South Korea's Kospi average dipped 0.33 percent to 2,329.17 as the Federal Reserve signaled more rate hikes ahead.

Chipmaker SK Hynix and automaker Hyundai Motor both fell around 2 percent while battery maker LG Energy Solution rallied 3.5 percent and battery materials maker POSCO Chemical surged 7.1 percent.

Australian markets tumbled after three consecutive days of gains. The benchmark S&P/ASX 200 fell 128.80 points, or 1.84 percent, to 6,857.90 while the broader All Ordinaries index dropped 1.77 percent to 7,050.60.

Mining, energy and tech stocks led losses. Perpetual, an investment fund and trustee group, soared 7.1 percent after it rejected a $1.68 billion takeover bid from a consortium of buyers and backed the $2.51 billion offer from rival Pendal Group.

Activity across Australia's services sector contracted for the first time in nine months in October as a result of rising interest rates, a survey showed.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index closed 0.87 percent lower at 11,184.30. A2 Milk shares jumped 4.2 percent after the infant milk formula maker secured a temporary approval to export its milk formula to the U.S. following a shortage in the country.

U.S. stocks fell sharply overnight after the Federal Reserve raised rates by 75 basis points, as widely expected, and signaled more increases ahead saying the Committee will consider the cumulative tightening of monetary policy while determining the pace of future increases.

Observers characterized Fed chair Jerome Powell's comments at the press conference as more hawkish than expected.

The Dow lost 1.6 percent, the tech-heavy Nasdaq Composite plummeted 3.4 percent and the S&P 500 slumped 2.5 percent after Powell said it was "very premature" to discuss pausing rate increases and that the Fed hasn't "overtightened" yet.