Major Asian stocks are down 2.7%. Some stocks declined slightly, including China's Shanghai Composite and Shenzhen Composite, which lost 0.14% and 0.02% respectively, and Hong Kong's Hang Seng Index which fell by 0.73%. Other stock indices dropped more significantly: Australia's S&P/ASX 200 went down1.93%, while Korea's KOSPI decreased by 2.29%. Japan's Nikkei 225 was the top loser, it plunged by 2.67%.
Asia-Pacific stock indices traditionally follow the moves of US stock indices. In turn, Wall Street indices declined at the close of trading on Friday after US Federal Reserve Jerome Powell's speech. Powell said that the Fed's primary goal is to return to the inflation rate of 2%. The regulator will take tougher measures to achieve this goal if necessary.
Powell's speech was the reason why market makers lost a positive attitude to the possible reduction of interest rates next year. A tighter monetary policy in the US will inevitably have an impact on Asia-Pacific markets.
According to the US Fed Chair, an increase in interest rates and lower economic growth will curb inflation and at the same time hit business activity and households. However, if the US regulator will not fight inflation, it will have negative results in the long run.
Shares of M3 Inc., Omron Corp. and Daikin Industries Ltd. were the top losers among Japanese companies. They fell by 5.7%, 5.1%, and 4.7% respectively.
According to the latest statistical data, the total income of the largest industrial companies in China decreased by 1.1% during the first half of 2022 compared to the same period of 2021. The total income of the enterprises was 48.93 trillion yuan ($6.31 trillion).
Shares of China Hongqiao Group, Ltd., Longfor Group Holdings, Ltd., and Techtronic Industries, Co. Ltd. were the top losers among the components of Hong Kong's Hang Seng Index. They plunged by 5.5%, 5.2%, and 4.6% respectively.
Stocks of Samsung Electronics Co. as well as Hyundai Motor Co declined among the components of Korea's KOSPI. They lost 2.2% and 2.8% respectively.
At the same time, Australia saw a 1.3% month-on-month increase in retail sales last month, compared with a 0.2% increase in June. Sales totaled A$34.67 billion ($23.74 billion). Moreover, the index exceeded forecasts of experts who predicted the increase by 0.3%.
At the same time, the stocks of major Australian companies declined. Shares of BHP fell by 1.6% and Rio Tinto dropped by 2.4%.
