Asian Shares Muted Amid Inflation, China Concerns

asian market down 21mar22 lt

Asian stocks ended flat to slightly lower on Monday, as the war in Ukraine rages on and a high-ranking Federal Reserve official made hawkish remarks on borrowing costs, saying that it is necessary to raise the interest rate by 50 basis points at least once this year. In addition, China's central bank dashed hopes for an interest rate cut by keeping lending rates unchanged. The Japanese market was closed for a holiday.

Chinese shares ended flat with a positive bias as the People's Bank of China kept its benchmark interest rate unchanged, raising concerns about whether there would be adequate policy support to spur growth. Hong Kong's Hang Seng Index fell 191.06 points, or 0.9 percent, to 21,221.34.

Australian markets ended slightly lower. The benchmark S&P/ASX 200 Index slipped 15.90 points, or 0.2 percent, to 7,278.50 as the country imposed an immediate ban on exports of alumina and aluminum ores, including bauxite, to Russia. The broader All Ordinaries Index ended down 12.30 points, or 0.2 percent, at 7,558.90.

Miners and energy stocks rose on stronger iron ore and oil prices. Technology stocks outperformed, with Block Inc. shares climbing over 9 percent. Asset manager Magellan Financial lost 4.3 percent after co-founder Hamish Douglass resigned from the company's board.

Seoul stocks fell notably to snap a three-day winning streak, weighed down by uncertainty over the Ukraine-Russia conflict and worries over U.S. monetary policy. The Kospi dropped 20.97 points, or 0.8 percent, to close at 2,686.05. Samsung Electronics, SK Hynix, Naver and Kakao shed 1-3 percent.

New Zealand shares ended on a flat note as Russia-Ukraine peace talks dragged on and two of the Fed's most hawkish policymakers said that the central bank needs to take more aggressive steps to combat inflation. The NZX-50 Index edged up 1.90 points to finish at 12,177.75.

Ebos Group and Vista Group International climbed 2-3 percent, while Auckland International Airport shares fell about 4 percent.

U.S. stocks finished higher for the fourth straight session on Friday to cap off the strongest week since November 2020, as President Joe Biden spoke with Chinese President Xi Jinping about the Russia-Ukraine war.

Biden reportedly described the implications and consequences if China provides material support to Russia. Xi told Biden that the United States and China each had an obligation to promote peace.

The Dow rose 0.8 percent and the S&P 500 added 1.2 percent, while the tech-heavy Nasdaq Composite surged 2.1 percent.

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