© Reuters.
By Amber Warrick
Investing.com — Asian stocks posted mixed results on Thursday as markets weighed a possible economic recovery in China against concerns about rising inflation and interest rates in the rest of the world.
China’s indices remained in a tight range, with gains now cooling off after a two-day rally. Data on Wednesday showed the country expanded at its fastest pace in more than a decade after most anti-COVID restrictions were lifted.
Attention now turns to an upcoming meeting of high-level Chinese officials this week, which could result in more policy changes in Asia’s biggest economy.
Other China-exposed indices saw some profit-taking after a strong rally on Wednesday. Hong Kong’s index sank 0.8% after rising more than 3% in the previous session, while the index held steady.
Hong Kong shares of real estate giant china vanke Co Ltd (HK:) fell nearly 4% after the company said it raised nearly $500 million in a share sale.
An overnight rise in US Treasury yields put pressure on most Asian markets, as an unexpected rise through February had traders pricing in a higher chance of stubborn inflation keeping rates down. US interest rates higher for longer.
The hotter-than-expected data also heralded a similar reading to be released later on Thursday, which could invite more aggressive moves from the .
The prospect of rising interest rates bodes ill for Asian stocks, as they limit foreign capital flows to the region. Regional central banks also raise interest rates to keep up with the , which keeps liquidity muted.
Weak economic readings also weighed on regional sentiment. South Korea slumped more than expected in January, sinking 2.1% as the country grapples with high inflation and rising interest rates.
But South Korea’s index rose 0.8% in recovery trade after a holiday on Wednesday.
Japan’s was flat as it rose in the fourth quarter even as trade profits declined. The Japanese was also weaker than expected in February, pointing to a possible decline in retail spending.
Australia’s was flat as gains in major mining stocks were largely offset by weakness in banking stocks. Australia slumped much more than expected in January as rising mortgage rates kept homebuyers at bay.
India’s indices sank 0.5% each ahead of Friday’s reading.