Investing.com – Most Asian stocks fell on Wednesday as expectations for fresh signals on inflation and the Federal Reserve, while reports of increased U.S. controls on trade with China also weighed on sentiment.
Regional shares received few positive signals from a record high close in the indexes and indices, driven mainly by strength from tech heavyweights. US stock futures were little changed in Asian trading.
Chinese stocks fall as reports show new trade problems between US and China
China and indexes fell about 0.2% each, while Hong Kong’s indexes fell 1.6% and were the worst performers among Asian indices.
Reports have suggested that the US is considering expanding trade sanctions on semiconductor exports to Russia and could potentially target Chinese and Hong Kong chip resellers that potentially supply products to Moscow.
Increased US attention to Chinese companies has raised concerns about deteriorating trade ties between the world’s largest economies. Previously, in 2024, the United States imposed increased import duties on several major Chinese industries.
Mixed inflation data in China also provided lackluster signals for the economy. Although inflation fell at its slowest pace in 15 months in May, it rose less than expected.
Other Asian markets also fell. Japan’s indexes and indexes fell about 0.8% each after inflation was higher than expected in May.
The data was released just days ahead of the index, when the central bank is expected to tighten policy further by cutting some bond purchases.
The higher PPI readings also come as the Bank of Japan forecasts that inflation will rise this year, giving the bank further incentive to raise interest rates further.
Australian shares fell 0.5%, while South Korean shares stood out among peers, rising 0.3% as chipmaker shares gained some strength.
India index futures are pointing to a neutral open after the index hit new record highs this week. The Nifty largely ignored the impact of the surprise result in the 2024 general elections, in which the BJP-led alliance won a smaller majority.
But Prime Minister Narendra Modi’s cabinet appointments unveiled this week showed his economic reform plans are on track.
Fed rate decision, consumer price index in focus
Sentiment remained generally volatile ahead of the end of the Fed’s two-day meeting later on Wednesday, which the central bank is expected to hold.
But his inflation forecasts and plans to cut rates will be closely watched.
Key data also due ahead of the Fed’s meeting on Wednesday is expected to show inflation remained stable in May, giving the Fed little incentive to start cutting rates.