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Asian Shares Fall On Interest Rate Worries


Asian stocks fell on Thursday as trade war fears resurfaced and the U.S. Federal Reserve sounded slightly more hawkish after raising interest rates for the second time this year.

Investors also adopted a cautious stance ahead of the European Central Bank's monetary policy announcement later in the day amid expectations the central bank will signal a winding down of its vast bond-buying program by the end of this year.

China's Shanghai Composite Index dipped 5.33 points or 0.2 percent to 3,044.46 after reports suggested the Trump administration is preparing to proceed with tariffs on Chinese goods.

Hong Kong's Hang Seng Index fell 284.98 points or 0.9 percent to close at 30,440.17 after a slew of economic data from China disappointed investors.

Industrial production in China was up an annual 6.8 percent in May, the National Bureau of Statistics said. That was shy of expectations for 7.0 percent, which would have been unchanged from April.

Chinese retail sales grew an annual 8.5 percent in May - also missing expectations for 9.6 percent and down from 9.4 percent in the previous month.

Fixed asset investment gained 6.1 percent year-on-year, missing forecasts for 7.0 percent, which would have been unchanged from the April reading.

Japanese shares lost ground as a firmer yen on worries about global trade and a faster pace of interest rate hikes sapped investors' appetite for risk.

The Nikkei 225 Index slumped 227.77 points or 1 percent to 22,738.61, while the broader Topix Index closed 0.9 percent lower at 1,783.89.

Toyota shed 0.9 percent after saying it will invest $1 billion in Asia ride-sharing company Grab. Honda Motor, Nissan, Panasonic and Sony declined 1-2 percent. Toshiba jumped 2.7 percent after announcing a share buyback.

Japanese industrial production climbed 0.5 percent month-over-month in April, faster than the 0.3 percent estimated earlier, final data from the Ministry of Economy, Trade and Industry showed. This marked the third successive monthly increase.

Australian shares fluctuated before closing slightly lower, dragged down by banks. The benchmark S&P/ASX 200 Index edged down 6.90 points or 0.1 percent to 6,016.60, while the broader All Ordinaries Index ended little changed with a negative bias.

The big four banks fell between half a percent and 1.1 percent ahead of ECB and BoJ meetings. Atlas Iron slumped 18.2 percent after the government said it doesn't have priority rights to develop certain ship berths in Port Hedland.

Material stocks bucked the downward trend, with heavyweights BHP Billiton and Rio Tinto rising 0.4 percent and 0.6 percent, respectively.

Gold miner Newcrest advanced 1 percent to snap a four-session losing streak. Telstra Corp, Australia's largest telecom company, jumped over 5 percent after an upgrade from J.P. Morgan.

DroneShield's shares climbed almost 14 percent after the drone security firm won its biggest ever order for DroneGuns from an unspecified Middle Eastern country.

The unemployment rate in Australia came in at a seasonally adjusted 5.4 percent in May, a tad below expectations for 5.5 percent and down from 5.6 percent in April. The economy added 12,000 jobs last month, shy of expectations for 19,000 after an addition of 22,600 a month earlier.

South Korea's Kospi index tumbled as much as 1.8 percent on the first trading day after a meeting of U.S. and North Korean leaders. Technology firms Samsung Electronics and SK Hynix fell over 2 percent, while LG Electronics soared 4 percent.

New Zealand shares recovered from an early fall to finish marginally higher, led by healthcare stocks. Fisher & Paykel Healthcare Corp rallied 1.8 percent to extend gains for an 11th straight session.

New Zealand's house prices and sales volume increased in May from a year ago, the Real Estate Institute of New Zealand said. The national median house price index rose 5.0 percent year-over-year to $562,000. On a monthly basis, house prices climbed 2.2 percent.

The Indonesian market was closed for Eid-ul-Fitr. The Taiwan Weighted tumbled 1.4 percent and Singapore's Straits Times index was losing 1.3 percent while India's Sensex was declining 0.4 percent and Malaysia's KLSE Composite index was down 0.1 percent.

Overnight, U.S. stocks fell slightly as trade war fears resurfaced and the Fed signaled more aggressive pace of rate hikes after lifting short-term interest rate a quarter percentage point, citing a strengthening economy.

The Dow slid half a percent, the S&P 500 dropped 0.4 percent and the tech-heavy Nasdaq Composite eased 0.1 percent.

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