Asian Shares Follow Wall Street Lower

Asian stocks fell sharply on Thursday after the minutes from the Federal Reserve’s most recent meeting suggested that most members of the committee were thinking interest rates would need to go higher due to inflation as well as a tight labor market.

U.S. non-farm payroll data is set to be released on Friday, which would give further indication on how soon the central bank may raise rates. Higher interest rates increase borrowing costs for businesses and consumers, potentially resulting in less spending.

Chinese shares ended off their day’s lows after data showed activity in China’s services sector expanded at a faster pace in December.

The services sector in China continued to expand in December, and at a faster pace, the latest survey from Caixin revealed, with a services PMI score of 53.1. That’s up from 52.1 in November.

China’s Shanghai Composite Index dropped 9.10 points, or 0.3 percent, to 3,586.08, while Hong Kong’s Hang Seng Index finished 0.7 percent higher at 23,072.86.

Japanese shares fell the most in six months after a sell-off on Wall Street last night. The Nikkei 225 Index plummeted 844.29 points, or 2.9 percent, to 28,487.87, marking its biggest drop since June. The broader Topix tumbled 42.26 points, or 2.1 percent, to 1,997.01.

Tokyo Electron, Advantest and Screen Holdings all lost around 4 percent. Sony Group slumped 6.9 percent after climbing almost 4 percent in the previous session. Uniqlo clothing shop owner Fast Retailing gave up 4.9 percent after posting an 11 percent drop in December same-store sales.

Australian markets posted their biggest drop since September 2020, as signs of an earlier-than-anticipated U.S. rate hike hit technology stocks hard. Buy now, pay later firm Afterpay plummeted 10.8 percent, Xero tumbled 6.5 percent and Wisetech Global declined 6.9 percent.

Banks and miners also ended broadly lower amid rising risk aversion in the global markets. The benchmark S&P/ASX 200 Index plunged 207.50 points, or 2.7 percent, to 7,358.30, while the broader All Ordinaries Index ended down 220.30 points, or 2.8 percent, at 7,679.30.

Seoul stocks retreated for the second straight session on U.S. rate hike woes. The Kospi fell 33.44 points, or 1.1 percent, to 2,920.53. Internet portal giant Naver shed 4.7 percent and its rival Kakao lost 5.2 percent.

On the positive side, electric car maker LG Chem jumped 3.9 percent and steelmaker POSCO climbed 3 percent.

New Zealand shares tumbled, with tech stocks hit hard amid signs that U.S. interest rates would rise earlier than expected. The benchmark NZX-50 Index dropped 167.37 points, or 1.3 percent, to 12,983.01. Eroad, Vista Group and Pushpay Holdings lost 3-4 percent.

U.S. stocks tumbled overnight and bond yields moved higher amid interest rate worries after minutes from the Federal Reserve’s last meeting sounded a more hawkish tone, with policymakers admitting that there is plenty to justify tighter monetary policy to fight inflation.

Strong ADP private payroll report also boosted expectations of early rate increases. The Dow lost 1.1 percent, the S&P 500 declined 1.9 percent and the tech-heavy Composite Index plunged 3.3 percent.

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