Shares in Asia retreated on Friday after a mixed day on Wall Street as optimism over signs that the US Federal Reserve might temper its aggressive interest rate hikes was replaced by worries that the economy might be headed for a recession.
A US measure of inflation that is closely watched by the Fed eased in October, raising questions over the central bank’s determination to keep raising interest rates to tame price increases.
In addition, activity in US manufacturing contracted last month for the first time since May 2020, the Institute for Supply Management said.
The report also showed that prices are falling.
Slower growth due to tighter monetary policies has slowed new orders and order backlogs, “which saw manufacturing conditions contracting for the first time since June 2020,” IG Asia Pte market strategist Yeap Jun Rong (葉俊榮) said in a report.
That might suggest that with “inflation risks behind us now, ‘bad news’ in economic data may not be ‘good news’ for markets, as recession fears could be brewing,” he said.
Signs of weakening trade, especially for export dependent economies in Asia, have deepened worries over slowing growth in China and its implications for the global economy.
In Taiwan, the TAIEX closed down 42.12 points, or 0.28 percent, at 14,970.68. Turnover totaled NT$223.099 billion (US$7.29 billion). The index gained 1.3 percent from a week earlier.
Tokyo’s Nikkei 225 dropped 1.59 percent to 27,777.9, down 1.79 percent on the week, while the broader TOPIX declined 1.64 percent to 1,953.98, losing 3.17 percent weekly.
Hong Kong’s Hang Seng fell 0.33 percent to 18,675.35, but posted a weekly gain of 6.27 percent, while the Shanghai Composite index lost 0.29 percent to 3,156.14, up 1.76 percent week-on-week.
South Korea’s KOSPI shed 1.84 percent to 2,434.33, dipping 0.14 percent from a week earlier.
Australia’s S&P/ASX 200 slipped 0.72 percent to 7,301.5, but increased 0.58 percent weekly, while India’s SENSEX dropped 0.66 percent to 62,868.5, up 0.92 percent from a week earlier.
The declines followed a 0.1 percent retreat in the US’ benchmark S&P 500, which closed at 4,076.57 on Thursday.
Additional reporting by staff writer, with CNA
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