By Ambar Warrick
Investing.com-- Most Asian stock markets kept to a tight range on Friday, and were set for a muted week as hawkish signals from the Federal Reserve and worsening COVID-19 infections in China kept most investors from making large bets.
Hong Kong stocks were among the worst performers for the day, with the Hang Seng index down 0.7%. While the index saw volatile trade this week, it was still set to end the week nearly 4% higher on some optimism over the scaling back of COVID-19 restrictions in the city.
Chinese stocks also fell on Friday, and were set to end the week slightly positive amid some optimism over the relaxation of China’s zero-COVID policy.
Sentiment towards China was dented as the country logged its biggest daily jump in COVID cases in seven months. Rising infections brewed concerns over renewed lockdown measures in the country, which have severely crimped economic growth this year.
Weak economic readings from China released this week also showed that the country was struggling to navigate new lockdown measures, denting sentiment.
Broader Asian stocks were muted after a slew of hawkish signals from the Federal Reserve this week. St. Louis Fed President James Bullard said on Thursday that the central bank needs to raise interest rates much more to curb inflation, with a series of hikes this year having only a limited impact on price pressures.
While the bank is expected to U.S. inflation did ease more than expected in October, it remained well above the Fed’s annual target.in the coming months, Bullard’s comments could herald a longer-than-expected tightening cycle by the central bank. While
Such a scenario is expected to weigh on Asian stock markets, and is likely to see regional central banks also enact sharper rate hikes.
Japan’s Nikkei 225 index fell 0.1% on Friday, as consumer inflation in the country surged to a 40-year high in October. The reading, coupled with weakening economic growth, fed speculation that the Bank of Japan may eventually tighten its accommodative monetary policy.
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