Asia report: Stocks fall across region on interest rate concerns

Asia-Pacific markets saw a downturn on Friday, largely influenced by apprehensions spurred by comments from US Federal Reserve officials overnight, hinting at a possible delay in interest rate cuts.

That sentiment reverberated from Wall Street's overnight slump, leading to diminished investor confidence across the region.

“Most Asian stock markets are experiencing declines on Friday, in response to the drop in Wall Street's performance yesterday,” said TickMill market analyst Patrick Munnelly.

“This is due to renewed worries about the future of interest rates, as the possibility of a rate reduction in June remains unclear.

“The expectation of elevated energy prices leading to increased inflation may persuade the US Federal Reserve to refrain from reducing interest rates.”

Munnelly noted that the Japanese stock market saw a sharp decline on Friday, erasing all of the gains made in the prior session.

“This comes as a result of negative signals from Wall Street overnight.”

Japan leads broad losses, China remains closed

In Japan, the Nikkei 225 plunged 1.96%, closing at 38,992.08, and the broader Topix index shed 1.08% to reach 2,702.62.

Leading the declines on Tokyo’s benchmark were Tokyo Electric Power, Hoya Cor, and Tokyo Electron saw significant drops, falling 5.83%, 5.76%, and 5.6%, respectively.

Markets in mainland China remained closed for the Qingming Festival holiday, with no trading activity for the second day in a row.

The Hang Seng Index in Hong Kong recorded a marginal decrease of 0.01%, settling at 16,723.92.

Notable declines were seen in shares of Alibaba Health Information Technology, down 5.72%; WuXi AppTec, off 5.51%; and WuXi Biologics, which was off 4.84%.

South Korea's Kospi index fell 1.01% to close at 2,714.21, as Hanwha Aerospace saw a substantial decline of 9.96%, while Samsung SDI and Netmarble Games experienced losses of 4.86% and 3.51%, respectively.

The S&P/ASX 200 index in Australia dipped 0.56%, ending the day at 7,773.30, led lower by Champion Iron, down 7.42%; Capricorn Metals, off 5.46%; and Pexa Group, which was 5.15% lower.

Across the Tasman Sea, the S&P/NZX 50 index in New Zealand declined 0.19%, closing at 12,012.24.

Eroad, Mercury NZ and Mainfreight led the losses in Wellington, closing down 3.3%, 2.78% and 2.16%, respectively.

In currency markets, the dollar was last up 0.05% on the yen, trading at JPY 151.42.

It remained relatively unchanged against the Australian dollar, slipping 0.01% to AUD 1.5179, as it gained 0.05% on the Kiwi to change hands at NZD 1.6605.

On the oil front, Brent crude futures were last up 0.12% on ICE, trading at $90.76 per barrel, while the NYMEX quote for West Texas Intermediate declined 0.07% to $86.53.

Household spending rises in Japan, private sector activity expands in Hong Kong

In economic news, average household expenditure in Japan saw a 0.5% year-on-year decline in February, marking the 12th consecutive month of decreases.

However, the downturn represented the slowest rate of decline in a year, defying economists' expectations of a steeper 3% drop.

Despite that, real wages slipped in February, with the average monthly income per household standing at JPY 561,495.

That nominal increase of 0.7% was overshadowed by a 2.5% decrease in real terms compared to the previous year.

Elsewhere, Hong Kong's private sector activity saw a notable expansion in March, marking the first growth since December.

According to private surveys from S&P Global, the city's purchasing manager's index (PMI) rose to 50.9, up from 49.7 in February.

The return to growth was fuelled by incoming new business, prompting private sector firms to boost their employment and inventory levels.

Reporting by Josh White for Sharecast.com.