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Investing.com – Asia Pacific stocks were down on Tuesday morning as investors are concerned that the interest rate hikes might impact economic growth.
Japan’s Nikkei 225 fell 1.14% by 10:10 PM ET (2:10 AM GMT), and South Korea’s KOSPI fell 1.40%.
In Australia, the S&P/ASX 200 was down 1.47%.
Hong Kong’s Hang Seng Index tumbled 2.52%.
China’s Shanghai Composite inched down 0.01% while the Shenzhen Component was down 1.07%. Shanghai is further tightening its lockdown measures as China reiterated its zero-Covid policy.
“The idea of a benign and gentle tightening cycle has evaporated,” ANZ analysts told Reuters.
“The reality is that the U.S. Federal Reserve cannot control the supply side of the economy in the short-run, so as long as key indicators like the labor force participation rate stay low and Chinese exports slow, the risk to inflation, and therefore interest rates, lies to the upside,” ANZ said.
Central banks raised their interest rate to fight against soaring inflation.
The U.S. central bank hiked its interest rate to 1%, the biggest interest rate increase since 2000. Across the Atlantic, the Bank of England increased its interest rate to 1% as it handed down its policy decision on Thursday, the highest since 2009.
Overnight, U.S. stocks extended Friday’s sell-off as investors were concerned about a weakening economy.
On the data front, investors now await U.S. Core Consumer Price Index (CPI) on Wednesday, as well as the U.S. Producer Price Index and initial jobless claims, which are due on Thursday.
Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams, and Fed Governor Christopher Waller will speak later today.
