The Asian stock market was mainly in the red on Tuesday as tech shares faltered on the possibility of higher interest rates from the Federal Reserve, while investors were also cautious about regional stocks due to concerns over China’s slowing economy.
Weakness in the tech sector weighed on Japan’s Nikkei 225 index by 1.1%, while the Taiwan Weighted index rose 0.6% after losing 0.2% earlier in the session.
South Korea’s KOSPI fell 1.3% as major chipmakers slipped after Fed President Neel Kashkari said he expects the US central bank to increase interest rates one more time in 2023. Kashkari added that the rates should stay elevated to combat a sticky inflation and tight labor market.
The regional stock market was trading on unstable grounds due to the Fed’s hawkish stance, with the bank stating that interest rates may climb higher this year and remain raised for an extended period.
Chinese Stocks Slide on Real Estate Concerns
Chinese stocks edged lower on Tuesday amid the potential for a more severe decline in the country’s real estate market.
The blue-chip CSI 300 index shed 0.5%, while the Shanghai Composite lost 0.3%, and Hong Kong’s Hang Seng index dropped 1.1%. The three indexes have taken a sharp dive in recent sessions.
Troubled property developer China Evergrande Group was down 8.1%, having stumbled as much as 24% in the previous session after saying it would be unable to issue new debt while the government is investigating one of its businesses.
The announcement increased worries about further scrutiny in China’s significant real estate market, which has been cash-strapped for three years.
The crisis has led certain major investment banks and brokerages to reassess the country’s annual gross domestic product (GDP) growth outlook in recent weeks amid the waning possibility of a recovery in the world’s second-largest economy.
S&P Global Inc. now estimates China’s GDP growth at 4.8% this year, compared to the government’s expectations of 5%.
Investors await the release of the country’s composite purchasing managers’ index (CPI) data for September, which may indicate another drop in business activity.
