Asian stocks skittish as early rate cut hopes wane, China rout deepens
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Most Asian stocks retreated on Monday as strong labor market data and relatively hawkish comments from Federal Reserve Chair Jerome Powell saw traders further price out expectations of early interest rate cuts this year. Losses were driven chiefly by weakness in technology and property stocks, with both indexes trading at five and four-year lows. Chinese markets were now nursing an extended rout after vastly underperforming their global peers through 2023, amid persistent concerns over slowing economic growth in the country. Rate cut bets dim after nonfarm payrolls shock, Powell comments. Powell said in an interview with CBS 60 minutes that the central bank would take a “prudent” approach to cutting interest rates, with recent resilience in the economy giving the central bank more headroom to keep rates on hold. Powell’s comments come in the wake of a substantially stronger-than-expected nonfarm payrolls report for January, which showed that the labor market remained robust. Higher-for-longer U.S. rates bode poorly for Asian markets, given that they diminish the appeal of high-yield, risk-heavy assets. Nikkei 225 was among the few gainers in Asia, aided by purchasing managers index data which showed the country’s services sector grew more than expected in January.

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https://www.investing.com/news/stock-market-news/asian-stocks-skittish-as-early-rate-cut-hopes-wane-china-rout-deepens-3292147