Chinese blue chips dropped 0.9%, Hong Kong’s Hang Seng Index slipped 1.4%, while Australia’s S&P/ASX 200 index lost 0.5%
Several Asian share benchmarks dropped on Thursday as markets digested the implications of policymakers in major economies preferring to take a patient approach to monetary easing amid sticky inflation.
Geopolitical tensions were also at the forefront of investors’ minds as China’s military started drills around Taiwan just days after new Taiwan President Lai Ching-te took office.
That sent Chinese blue chips dropping 0.9%, while Hong Kong’s Hang Seng Index similarly slipped 1.4%.
In the wider market, MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.26%, while Australia’s S&P/ASX 200 index lost 0.5%, also hurt by a retreat in some commodity prices.
More hawkish-than-expected minutes of the Fed’s latest policy meeting, a hot UK inflation number and a sobering assessment of New Zealand’s inflation problems from the country’s central bank have caused investors to reduce their bets of the pace and scale of global rate cuts expected this year.
One thing that is interesting from the past 24 hours that can be taken away is still the uncertainty from central banks about policy settings and at what levels interest rates have to be at, and where they need to potentially stay at, in order to tame inflation, according to Kyle Rodda, senior financial market analyst at Capital.com.
That is causing uncertainty from a policy point of view, but it is obviously also causing uncertainty from a market point of view, he added.
Taiwan’s tech-heavy stock benchmark similarly hit a record high and traded 0.25% higher, while the MSCI Asia Pacific ex-Japan IT stocks index hit a more than two-year peak.
Japan’s Nikkei climbed 1.2%, drawing some support from a weaker yen that hit its lowest level in more than three weeks. The yen was last at 156.70 per dollar.
