On Tuesday, most Asian stocks experienced declines, extending recent losses as worries about slowing economic growth and high U.S. interest rates outweighed a larger-than-expected cut in China’s benchmark lending rate.
Chinese markets slightly fell after a lackluster return from the Lunar New Year holiday, and despite a 25-basis-point cut in the five-year loan prime rate (LPR) by the People’s Bank of China (PBOC) to 3.95%. This move aimed at determining mortgage rates indicated additional monetary support for the Chinese economy but failed to inspire confidence.
The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes in China fell by 0.3% and 0.1%, respectively, while Hong Kong’s Hang Seng index dropped by 0.4%. Persistent concerns over the slowing Chinese economic recovery have weighed on sentiment towards broader Asian markets.
Japan’s Nikkei 225 declined by 0.1%, retreating further from 34-year highs, and South Korea’s KOSPI lost 1.1%, with technology stocks contributing to the pressure.
Wall Street was closed on Monday for a holiday, and S&P 500 Futures, Nasdaq 100 Futures, and Dow Jones Futures all fell about 0.3% in Asian trade.
Australia’s ASX 200 fell by 0.2% as the minutes of the Reserve Bank of Australia’s February meeting revealed considerations of a rate hike amid persistent concerns over sticky inflation.
Futures for India’s Nifty 50 index suggested a muted open after the index recovered some recent losses on Monday.
The overall sentiment in Asian markets has been affected by worries over higher-for-longer U.S. interest rates, exacerbated by hot inflation readings last week and signals from several Federal Reserve officials that the bank is inclined to maintain higher rates in the near term.