Asian markets fell on Friday on lingering recession worries as data indicated that the US economy was slowing down, while US Federal Reserve officials pressed their case for further interest rate hikes to battle stubborn inflation.
The losses tracked a sell-off on Wall Street, where tech firms took a hit from bets on further monetary tightening and automakers tumbled due to concerns about a possible price war.
Investors were also spooked by earnings reports from US regional banks that pointed to a weakening profit outlook following sector turmoil last month that saw three lenders collapse.
Photo: AP
Figures showing recurring unemployment benefit claims hitting their highest level since November 2021 combined with an increase in new applications for jobless insurance pointed to a softening labor market.
That came with news that the closely watched Philadelphia Fed Manufacturing Index fell more than expected and stood in contrast to a surprise surge in the New York Empire Fed Survey on Monday.
The readings indicated the world’s top economy was beginning to feel the weight of a year-long rate hike campaign by the Fed.
However, while that suggests inflation could come down, there is a worry that a recession is coming.
“The trend higher in jobless claims clearly shows a slowing in the labor market and plays to views of a US recession in 2023,” National Australian Bank head of market economics Tapas Strickland said.
Oanda Corp senior market analyst Edward Moya said that jobless claims “will soon see new cycle highs as corporate America has steadily announced more layoffs.”
All three main indices on Wall Street ended in the red, and Asia followed.
In Taiwan, the TAIEX dropped 104.53 points, or 0.67 percent, to 15,602.99, down 2.05 percent from a week earlier. Turnover totaled NT$253.724 billion (US$8.29 billion).
Hong Kong’s Hang Seng lost 1.57 percent, closing at 20,075.73 and posting a weekly decline of 1.78 percent, while China’s Shanghai Composite Index dropped 1.95 percent to 3,301.26, down 1.11 percent on the week.
In Japan, the Nikkei 225 declined 0.33 percent to 28,564.37, but rose 0.25 percent weekly, while the broader TOPIX lost 0.23 percent to close at 2,035.06, up 0.81 percent from a week earlier.
In Seoul, the KOSPI slid 0.73 percent to 2,544.40, declining 1.05 percent weekly.
Australia’s S&P/ASX 200 dropped 0.43 percent to 7,330.4, down 0.42 percent from a week earlier. India’s SENSEX bucked the trend, inching up 0.04 percent to 59,655.06, but posted a weekly decline of 1.28 percent.
Additional reporting by staff writer, with CNA
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