Asian Shares Slide On China, Fed Concerns

Asian stocks declined on Thursday amid mounting China worries and on hawkish Fed minutes.

China’s offshore yuan hit a fresh nine-month low against the dollar on renewed concerns over a Chinese economic slowdown and fears of a debt meltdown in the country’s property sector.

Fears of further rate hikes weighed on risk appetite after the minutes of the Fed’s July meeting showed a number of officials still saw the need for more interest rates to curb stubborn inflation.

Chinese shares reversed course to end higher despite a warning from Fitch Ratings that it may reconsider China’s A+ sovereign credit score.

China’s Shanghai Composite index ended 0.43 percent higher at 3,163.74 as investors hoped for more stimulus including a potential interest rate cut next week.

Hong Kong’s Hang Seng index ended little changed at 18,326.63 after a sharp decline to a nine-month low earlier in the day.

Japanese shares closed lower as rising yields and speculation for the government’s intervention to curb the yen’s weakness dented investors’ appetite for risk.

Japan’s core machinery orders rose 2.7 percent in June from the previous month, while the country’s exports shrank for the first time in more than two years, separate reports showed earlier today.

The Nikkei average closed down 0.44 percent at 31,626, after having hit its lowest since early June. The broader Topix index dropped 0.34 percent to 2,253.06.

Steelmaker Kobe Steel, healthcare equipment maker Terumo and cosmetics maker Shiseido fell 1-3 percent.

Seoul stocks fell for a fifth consecutive session, with the Kospi average settling 0.23 percent lower at 2,519.85 on U.S. rate uncertainty and mounting concerns about the Chinese economy.

Samsung Biologics, SK Hynix and Naver shed 1-2 percent while leading batter maker LG Energy Solution jumped 2.7 percent.

South Korea’s export and import prices both rose last month following a rise in global oil prices, according to data released by the Bank of Korea today.

Australian markets fell notably as new data pointed to some cooling in the country’s jobs market.

Employment unexpectedly fell in July to end two months of very strong growth and the jobless rate ticked higher, raising speculation the Reserve Bank of Australia might be done hiking interest rates.

The benchmark S&P ASX 200 settled down 0.68 percent at 7,146 while the broader All Ordinaries index shed 0.64 percent to close at 7,364.40.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 index fell 0.95 percent to 11,651.58.

U.S. stocks fell for a second straight session overnight while yields on longer-term Treasuries reached their highest levels since October after the latest FOMC minutes showed that Fed officials were divided over the rate hike in July and saw “significant upside risks to inflation, which could require further tightening of monetary policy.”

In economic releases, housing starts for July showed positive momentum while U.S. industrial production returned to growth after two straight months of decline – separate reports showed.

The Dow dropped half a percent, the S&P 500 shed 0.8 percent and the tech-heavy Nasdaq Composite lost 1.2 percent.

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