Asian Stocks Decline Amid Rate Hike Concerns and China Property Market Issues

Most Asian stocks experienced a downward trend on Thursday, continuing the recent declines amid ongoing concerns about rising U.S. interest rates. Chinese equities were particularly affected by renewed worries surrounding the country’s struggling property market.

Japan’s stock market was the worst performer in the region, falling by 0.8% as increasing Treasury yields put pressure on major technology companies. Additionally, uncertainty ahead of a crucial economic report due on Friday contributed to a negative sentiment towards Japanese stocks.

Asian markets were influenced by a weak performance on Wall Street, where U.S. indices faced significant declines due to fears that the Federal Reserve might continue to increase interest rates this year. The Fed has also indicated an intention to maintain elevated rates for an extended period.

In China, the major stock index dipped by 0.3%, while another index remained flat. In Hong Kong, the stock market fell by 0.7%, primarily impacted by losses in property stocks after trading in shares of troubled developer China Evergrande was halted. Recent media reports suggested that Evergrande’s founder was under police surveillance, raising alarms about heightened governmental scrutiny of the property sector, which is already grappling with a cash crunch and potential bankruptcies among significant players.

The challenges faced by Evergrande negatively affected market sentiment ahead of the upcoming week-long Autumn Festival holiday, although increased consumer spending during the holiday may provide some support to the Chinese economy. Investors are also looking forward to economic data from China, which is expected over the weekend, for insights into the country’s economic activity.

In Australia, the stock index lost most of its gains for the day, reacting to uncertainty in China. Recent data showed that economic growth in Australia was less than anticipated in August, driven by high interest rates and inflationary pressures.

Elsewhere, futures for India’s stock index indicated a flat opening, as the market has struggled with significant declines after reaching record highs. Nevertheless, the Nifty index remains one of the stronger performers in Asia for September, showing a 2.4% increase.

Overall, most Asian markets are set to close lower for September, driven primarily by losses accumulated in the past week following the Federal Reserve’s indication of higher interest rates. This action has adversely affected global stock markets, as elevated rates lead to tighter monetary conditions and reduced returns on riskier assets. The Hong Kong Hang Seng index was particularly hard hit this month, dropping 3.4%, with technology stocks taking a significant hit. Similarly, Australia’s ASX 200 is on track for a decline of over 3%. China’s two main indexes fell between 0.6% and 1.5% this month and are trading close to their annual lows, while Japan’s Nikkei 225 saw a 1.9% decrease in September. Market concerns have been heightened by fears of an economic slowdown in China, especially in light of ongoing challenges in its property sector.