Investing.com– Most Asian stocks fell on Wednesday with markets remaining broadly risk-off before a closely-watched interest rate decision from the Federal Reserve later in the day, while weak economic readings from Japan also weighed.
Japan’s fell 0.3% as data showed the country’s and shrank less than expected in August. But Japan’s widened substantially more than expected, hitting a three-month low on weakness in China, which is one of the country’s biggest export destinations.
Focus this week is also on a meeting on Friday, amid some speculation that a pivot away from negative interest rates is imminent.
China’s and indexes fell 0.3% each, while Hong Kong’s lost 0.3% as the People’s Bank of China kept its unchanged, as widely expected.
The central bank has limited room to cut interest rates further and boost an economic recovery, given that rates are already at record lows. But the PBOC has also largely maintained its pace of liquidity injections to boost a slowing economic recovery.
Weakness in China spilled over into Australia, with the down 0.6%. The – an indicator of future Australian economic growth- read 0% for August, heralding continued weakness in the Australian economy as it grapples with high interest rates and slowing Chinese demand.
Futures for India’s index pointed to a weak open, as investors continued to lock-in some profits after local stocks touched record highs this week.
Fed angst keeps markets risk-off
Broader markets remained largely subdued, as investors hunkered down before the conclusion of a later in the day.
The Fed is expected to keep rates on hold. But a recent resurgence in U.S. inflation is expected to elicit a hawkish outlook from the central bank, which could open up the possibility of at least one more rate hike in 2023.
The Fed is also expected to reiterate its stance that interest – a scenario that presents more headwinds for Asian markets. Rising U.S. rates tightened monetary conditions across the globe and dried up foreign capital flows into regional markets over the past year.
Asian chipmakers extend losses on demand fears
Regional chipmaking stocks saw sustained losses this week, after a Reuters report showed that TSMC (TW:) (NYSE:)- the world’s largest contract chipmaker- had asked its suppliers to delay some deliveries on concerns over slowing demand.
TSMC’s Taiwan shares fell 0.3% on Wednesday, extending losses into a third straight session.
Memory chip makers SK Hynix Inc (KS:) and Samsung Electronics Co Ltd (KS:) sank 1.2% and 0.3%, respectively, also dragging the 0.2% lower.
Semiconductor Manufacturing International Corp (HK:), China’s biggest chipmaker, fell 1%, while peer Hua Hong Semiconductor Ltd (HK:) fell 0.6% in Hong Kong trade.
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