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Asian Shares Retreat On Hawkish Fed Talk

asian down 07oct22 lt

Asian stocks declined on Friday as investors digested hawkish comments from some Fed officials and awaited a key U.S. jobs report due later in the day for further clarity on labor market conditions. However, most regional markets posted sharp weekly gains following a brutal September.

The dollar and Treasury yields pushed higher after Fed officials including Fed Governor Lisa Cook, Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari backed further interest rate hikes to tame high inflation.

Gold prices were subdued in Asian trading on dollar strength, while oil extended gains and were set for the biggest weekly gain since March, buoyed by the OPEC+ decision to cut production targets by 2 million barrels per day.

Chinese markets remained closed for the Golden Week holiday. Hong Kong's Hang Seng Index tumbled 1.5 percent to 17,740.05, with Chinese property developers pacing the declines on concerns over their financial health.

Japanese stocks fell notably as data showed household spending slowed in August, adding to headwinds from rising inflation and a weakening yen.

The Nikkei 225 Index dropped 0.7 percent to 27,116.11, snapping a four-day winning streak. The broader Topix ended 0.8 percent lower at 1,906.80.

Worse-than-expected earnings outlooks from Advanced Micro Devices and Samsung Electronics weighed on the tech sector, with Advantest falling 1.1 percent and Screen Holdings giving up 1.4 percent.

Central Japan Railway, East Japan Railway and West Japan Railway all rose about 2 percent ahead of Japan reopening its borders fully on October 11.

Seven & I Holdings tumbled 3.5 percent despite the company raising its profit forecast for the current financial year.

Seoul stocks ended lower to snap a three-day winning streak. The Kospi slipped 0.2 percent to 2,232.84 but gained 3.6 percent for the week, marking the first weekly gain in eight and the biggest since early February 2021.

Technology giant Samsung Electronics ended 0.2 percent lower after flagging a worse-than-expected 32 percent drop in quarterly operating earnings.

Australian markets closed lower but posted their best weekly gain in two years after the Reserve Bank sent dovish signals to markets.

The benchmark S&P ASX 200 Index dropped 0.8 percent to 6,762.80 but had a 4.5 percent gain for the week, its best weekly performance since October 2020. The broader All Ordinaries Index ended 0.8 percent lower at 6,976.10, dragged down by miners and banks.

Across the Tasman Sea, New Zealand's S&P NZX-50 Index eased 0.2 percent to settle at 11,103.79.

U.S. stocks ended lower for a second straight session overnight as the jobs report loomed and rising oil prices added to inflation woes.

The Dow fell 1.2 percent, the S&P 500 shed 1 percent and the tech-heavy Nasdaq Composite declined 0.7 percent.

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