Asian Shares Slide On Hawkish Fed Minutes

Asian stocks fell on Thursday after minutes from the Fed’s March meeting revealed discussions on reducing the size of the central bank’s balance sheet over time in a predictable manner.

Participants generally agreed to beginning to reduce the balance sheet as early as May. The monthly roll-off would consist of $95 billion worth of Treasuries and mortgage bonds.

The dollar and yields gained, while gold prices fell on speculation the U.S. central bank will raise interest rates by a hefty 50 basis points at its meetings in May and June.

A slew of Fed officials, including St. Louis Fed President James Bullard, Atlanta Fed President Raphael Bostic and Chicago Fed President Charles Evans are scheduled to speak at separate events later in the day.

Chinese shares lost ground despite the country’s cabinet pledging to use monetary policy tools at an “appropriate time” to boost the economy amid a Covid outbreak and property-market woes.

The benchmark Shanghai Composite Index tumbled 1.4 percent to 3,236.70, while Hong Kong’s Hang Seng Index ended down 1.2 percent at 21,808.98.

Japanese shares fell the most in a month on worries over the war in Ukraine and Covid-19 lockdowns in China. The Nikkei 225 Index slumped 1.7 percent to 26,888.57. Chipmakers and auto companies led losses, with Advantest, Tokyo Electron and Honda losing 4-5 percent.

Australian markets ended lower after export figures for February came in largely flat and a measure of services activity dropped in March. The benchmark S&P ASX 200 Index fell 0.6 percent to 7,442.80, with tech companies and banks pacing the decliners. Struggling theme park operator Ardent Leisure soared 6.2 percent on a deal to offload its U.S. division.

Seoul stocks tumbled, dragged down by technology stocks after the Nasdaq 100 posted its worst two-day loss in almost a month overnight. The Kospi plunged 1.4 percent to 2,695.86 amid selling by both foreign investors and institutions.

Market heavyweight Samsung Electronics gave up 0.7 percent despite its earnings guidance that showed its best first quarter earnings in four years.

New Zealand shares finished marginally lower after having suffered heavy losses earlier in the session. Heavyweights Fisher & Paykel Healthcare and Meridian Energy both fell over 2 percent.

U.S. stocks fell overnight as tech and other growth shares were hit by a surge in bond yields amid expectations of steeper rate hikes by the Federal Reserve.

The tech-heavy Nasdaq Composite fell 2.2 percent, the S&P 500 declined 1 percent and the Dow eased 0.4 percent.

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