By Ambar Warrick
Investing.com -- Most Asian stock markets sank on Friday, extending losses into a third straight session as concerns over an economic slowdown were exacerbated by weak data, while hawkish signals from the Federal Reserve also rattled sentiment.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes were the worst performers for the day, down over 1% each as concerns over a mixed economic recovery in the country soured sentiment towards local stocks.
While the Chinese economy grew more than expected in the first quarter, the manufacturing sector continued to struggle.
Data also showed that foreign direct investment in China grew much less than expected in March, reflecting some doubts over just how much the economy will rebound this year.
Japan’s Nikkei 225 index fell 0.2% as data showed consumer price index inflation remained sticky through March. The reading puts more pressure on the Bank of Japan to eventually tighten policy, despite dovish signals from new Governor Kazuo Ueda.
A weak overnight session on Wall Street also provided negative cues for Asian markets, following a string of softer-than-expected earnings, particularly in electric carmaker Tesla Inc (NASDAQ: TSLA ). Losses in Tesla spilled over to several Chinese EV makers.
Hawkish signals from Federal Reserve officials continued to rattle sentiment, with policymakers calling for more rate hikes to curb relatively high inflation.
Philadelphia Fed President Patrick Harker warned on Thursday that U.S. interest rates will likely rise further and remain there for longer, even as economic activity cools. The Fed’s Beige Book , released earlier this week, painted a dour picture of the world’s largest economy.
Markets are now positioning for one more rate hike by the Fed in May, and are somewhat conflicted over a potential pause in June.
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