Stock Market

Asian Markets Cautious Ahead of Key U.S. Inflation Data, Hang Seng Index Leads Losses with Drop in Tencent Shares

On Wednesday, many Asian stock markets traded lower, as investors grew increasingly cautious ahead of key U.S. inflation data. The Hang Seng index in Hong Kong saw the largest decline, falling 0.6% due to a sharp drop in heavyweight Tencent, which lost 4% of its value. Major shareholder Prosus deposited 96 million Tencent shares into the Hong Kong Central Clearing and Settlement System to finance a share repurchase program, which typically signals a sale of shares.

Electric carmaker BYD Co Ltd also saw a decline of 1.9% after Warren Buffett’s Berkshire Hathaway further reduced its stake in the company by selling approximately 2.48 million shares. Meanwhile, broader Asian markets remained mostly muted, with China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes showing marginal gains despite weaker-than-expected inflation data released earlier in the week.

Japan’s Nikkei 225 index, on the other hand, increased by 0.6%, building on strong gains from Tuesday when Warren Buffett expressed interest in investing in local stocks. Furthermore, data revealed that producer price index inflation in Japan slowed down for the second consecutive month in March, although at a slower-than-expected pace.

Investors eagerly anticipating U.S. CPI data, which is expected to show that inflation eased substantially in March. In addition, investors are focusing on the minutes of the Federal Reserve’s March meeting, scheduled for later in the day, for more information on monetary policy. However, some market speculators have expressed concern that the central bank may have limited headroom to continue raising interest rates. Higher interest rates and slower lending, according to Minneapolis Fed President Neel Kashkari, could lead to a U.S. recession this year, which could negatively impact appetite for risk-driven assets.

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