Asian stocks ebbed lower on Friday offsetting hopes for a higher ending of the week. Hong Kong’s Hang Seng index handed back its gains on Friday and slipped 2.18%. Japan’s Nikkei 225 index fell more than 1.58%. Australia’s ASX 200 index was at a standstill as lockdown restrictions were eased. Mainland Chinese stocks, Shanghai Composite and Shenzhen Component also inched lower.
Hong Kong’s Market Outlook
Hong Kong’s Hang Seng index jumped on Thursday following the Federal Reserve’s dovish tone on its monetary policy. The index started the week lower following China’s crackdown.
China imposed new strict restrictions on private education companies which sent shockwaves through markets. It banned tutoring companies from raising money through the stock market or accepting foreign investments.
However, China announced that it would continue allowing Chinese companies to go public in the US as long as they met listing requirements. Investors were concerned about the regulatory actions in China since it seemed that Beijing was trying to halt capital flows into Chinese assets.
The Federal Reserve’s dovish tone seemed to calm market fears amid surging inflation. According to the monetary policy statement released on Wednesday, the Fed decided to maintain its federal cash rate and its bond-buying program.
According to the committee, despite the surge in inflation, the Fed is in no rush to hike its interest rates. The committee expects inflation to reach the 2% target in the long term.
Hang Seng Movers
WH Group Ltd was the best performer in the Hong Kong index. WH is a publicly traded Chinese multinational meat and food processing company. The company’s stock price advanced by 3.22%.
Techtronic Industries Co Ltd, designs, produces and markets power tools. The company gained more than 1.77% in its stock earnings.
On the flipside, Alibaba Health Information Technology Ltd was the worst performer in the index. The tech company slipped 9.78% in its stock price. After China’s regulatory actions, analysts expected the companies price target to decline to $152.
Meituan fell 9.19% on Friday extending its week’s losses. The company faces regulatory risks as China warns food delivery firms on the rights of their workers.
Haidilao International Holding Ltd was also among the laggards. The restaurant company’s stock price dipped 7.79%. The company has been in the red following its earnings report on Sunday. The company warned of higher expenses due to new restaurant openings and the negative impact of the pandemic.