Asian Stocks Hit by Fed Fears

Most Asian stocks fell further on Tuesday as technology majors came under pressure from new US export restrictions and a hawkish Federal Reserve, although Chinese indexes were supported by several strong earnings forecasts.

The Taiwan Weighted Index, which is heavily exposed to Chinese chipmaking stocks, fell 4% to a near two-year low after the US announced measures limiting their access to some US-made technology. The move signals more trouble for Asian chipmakers and could potentially worsen ties between the world's two largest economies. Hong Kong's Hang Seng index fell 1.7%, with technology stocks among the biggest heavyweights. Big companies such as Baidu (HK:9888), Alibaba (NYSE:BABA) Group Holding Ltd (HK:9988) and Tencent Holdings Ltd (HK:0700) lost between 2.6% and 5%. Major semiconductor-linked Chinese stocks, including Anji Microelectronics Tech (SS:688019), were the worst performers on the blue chip index, losing over 10%. But China's major stock indexes rose on Tuesday, supported by a strong outlook for COSCO Shipping Holdings Co Ltd (SS:601919) and battery maker Contemporary Amperex Technology Co Ltd (SZ:300750), or CATL. The two stocks gained 2.8% and 5.5%, respectively. The shipping giant forecast a more than 40% rise in profit attributable to shareholders in the nine months to Sept. 30, citing an improvement in freight rates. CATL, which supplies batteries to electric carmaker Tesla Inc (NASDAQ:TSLA), said it expects third-quarter earnings to nearly triple on rising demand for electric vehicles around the world. The two forecasts helped improve sentiment ahead of the third-quarter earnings season, even as China's economic prospects appeared to darken. A resurgence in COVID-19 cases has investors fearing more lockdown measures ahead of the Communist Party's 20th Congress this week. China's Shanghai Shenzhen CSI 300 index rose 0.5%, while the Shanghai Composite index gained 0.4%. This week the focus will be on domestic inflation and trade data for further clues on the potential recovery in the Chinese economy. Broader Asian shares pointed to deep losses. South Korea's technology-based KOSPI index fell 2.4%, while Japan's Nikkei 225 index declined 2.7% after Monday's holiday. Asian markets made a weak start to the week, exacerbated by hawkish signals from Federal Reserve Vice Chair Lael Brainard on Monday. Brainard said the central bank does not intend to make a dovish turn in the near term and will only ease its hawkish stance once it is convinced that inflation is on the rise. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!