SINGAPORE — Asia-Pacific markets traded mostly lower on Friday, following overnight losses on Wall Street, as investors assessed monetary policy decisions from two key central banks.
In Hong Kong, the Hang Seng index slipped 0.79% while the tech-focused Hang Seng Tech Index dropped 2.14%.
Hong Kong-listed shares of Chinese tech companies sold off sharply: Alibaba shares fell 3.07%, JD was down 3.65%, Meituan declined 3.27%, search engine giant Baidu tumbled 1.01% and Tencent slipped 2.25%.
The United States on Thursday said it was imposing trade restrictions on more than 30 Chinese research institutes and entities over human rights violations and the alleged development of technologies, such as brain-control weapons, that undermine U.S. national security.
South Korea’s Kospi traded near flat, up just 0.06% after erasing earlier losses.
In Australia, shares bucked the downward trend with the benchmark ASX 200 gaining 0.68%.
Friday’s session follows overnight declines on Wall Street where weakness among large tech stocks dragged down major market averages.
Central banks in focus
Elsewhere, the Bank of England hiked interest rates on Thursday for the first time since the pandemic started. It raised its main interest rate from a historic low of 0.1% to 0.25% amid mounting inflation pressure.
The European Central Bank further cut its bond purchases overnight but vowed to continue its unprecedented monetary policy support for the euro zone economy into 2022. It left the benchmark refinancing rate unchanged at 0%, while the rate on its marginal lending facility remained at 0.25%.
Decisions from Bank of England and European Central Bank followed after earlier in the week, the U.S. Federal Reserve said it will accelerate the reduction of its monthly bond purchases, after which, the central bank expects to start raising interest rates.
The Bank of Japan is due to announce its monetary policy decision today and analysts say they do not expect any substantive changes.
Weak inflation expectations is one of the likely reasons that the Bank of Japan will not follow in the same direction as the Fed on Friday, Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, wrote in a Friday morning note.
“All the developed economies have faced supply bottlenecks for some products,” Capurso said.
“The sharp contrast between high US inflation and barely existent inflation in Japan suggests that supply bottlenecks are not dominating the overall inflation trend,” he said, adding, “Other factors such as a very strong demand impulse in the US compared to elsewhere, including Japan, is probably behind the US’s exceptional inflation impulse.”
Currencies and oil
In the currency market, the dollar index traded near flat at 96.028 against a basket of its peers.
Oil prices fell on Friday during Asian trading hours. U.S. crude futures dipped 0.33% to $72.14 while global benchmark Brent fell 0.24% to $74.84.