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Investors Brace for Bearish Market Trends as SoftBank’s Stake Sell-Off Plans for Alibaba Contribute to Asian Stock Markets’ Downturn

On Thursday, the Asian stock markets experienced a downward trend, reflecting the global market’s bearish sentiment. The market downturn was attributed to multiple factors, including a weaker-than-expected inflation data, concerns over the possibility of a US recession, and the possibility of a pause in the Federal Reserve’s rate hike cycle.

Alibaba Group Holding Ltd (HK:9988) (NYSE:BABA) was among the worst hit, with a 3% decline in shares, leading to Hong Kong’s Hang Seng index being down by 0.5%. The slump was largely attributed to reports of SoftBank Group Corp (TYO:9984) planning to sell almost all its stake in the e-commerce giant.

Investors’ concerns were further fuelled by the continued losses in Hong Kong’s technology firms, following Prosus (AS:PRX) announcement that it would be selling more shares in the major shareholder, Tencent (HK:0700).

However, there was some positive news from China’s economic readings, which contributed to the Shanghai Shenzhen CSI 300 index experiencing a 0.4% decline while the Shanghai Composite remained flat. The rebound in the country’s exports in March showed an improvement in weak offshore demand that had battered the country’s manufacturing sector.

Despite a possible pause in the Federal Reserve’s rate hike cycle in the near future, policymakers expressed concern over a mild recession, leading to a flat-to-low range in broader Asian markets. The market uncertainty fuelled investors’ shift to safe haven assets such as gold, with Philippine shares leading the losses across Southeast Asian markets. Meanwhile, Australia’s ASX 200 fell by 0.3%, despite substantially stronger-than-expected labor data for March fueling bets that the Reserve Bank of Australia may not be done with raising interest rates, despite announcing a pause earlier this month.

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