Ken Woo Report. Edited by Edmund Claman
A man watches stock prices on an electronic board outside a brokerage firm, in Tokyo, Japan, March 20, 2023. REUTERS/Androniki Christodoulou/File photo obtained licensing rights
HONG KONG (Reuters) – Asian stocks fell on Wednesday after weak economic data in China and Europe stoked concerns about global growth, while the dollar rose as investors weighed expectations for US interest rates.
MSCI’s index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.5% at 0143 GMT.
Australia’s S&P/ASX 200 fell 0.55% even as Q2 GDP beat expectations for a 0.4% rise.
The Hang Seng Index (.HSI) and the Chinese benchmark CSI300 Index (.CSI300) opened around 0.3% lower.
A survey of the private sector on Tuesday showed that service activity in China expanded at the slowest pace in eight months in August, reflecting weak demand.
Manufacturing data from Germany, Britain and the Eurozone also showed declines, while services sectors in these countries fell.
“The downturn in China was larger than expected,” said Redmond Wong, Greater China Market Strategist at Saxo Markets.
“The Chinese government is becoming more proactive and easing more regulations, but whether it is good enough remains to be seen,” he added.
“European data has been rather weak. We think there is still a big chance of a mild recession in the US and Europe towards the end of the year or the beginning of next year.”
Stocks in Europe and the United States fell on Tuesday on concerns about weak global growth.
The yield on the 10-year US Treasury rose by 9 basis points to 4.26% after reaching 4.268%, its highest level since August 25, while the US dollar rose to its highest level in nearly six months against a basket of currencies.
Investors are digesting recent signs of a possible hike in US interest rates. Federal Reserve Governor Christopher Waller said on Tuesday that the latest round of economic data gives the US central bank room to see if it needs to raise interest rates again.
“The Fed is our focus, and we think they have more work to do with the prospect of US interest rates continuing to rise,” said John Milroy, investment advisor at Ord Minute.
US crude rose 0.16% to $86.83 a barrel. Brent crude rose 0.19% to trade at $91.21 a barrel.
And gold fell in spot transactions by 0.07% to 1924.5 dollars an ounce, after it reached its lowest level since the first of August on Tuesday.
(This story has been rewritten to correct the Reuters Hang Seng Indicator tool code in paragraph 4)
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