---
title: "Asian equities swing lower, led by China tech: markets wrap"
description: "A gauge of Asian stocks dipped, led by declines in Hong Kong-listed technology shares, and US equity futures dropped as traders continued to digest more hawkish comments by Federal Reserve officials."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-03-02-asian-equities-swing-lower-led-by-china-tech-markets-wrap/"
published: "2023-03-02T06:16:36"
lang: "en-ZA"
word_count: 328
---

# Asian equities swing lower, led by China tech: markets wrap

> A gauge of Asian stocks dipped, led by declines in Hong Kong-listed technology shares, and US equity futures dropped as traders continued to digest more hawkish comments by Federal Reserve officials.

By Bloomberg · Published 2 March 2023, 08:16 SAST

## Key points
- Asian stocks dropped back on Thursday as the 10-year Treasury yield pierced the closely-watched 4% level, with traders now pricing in a peak US policy rate of 5.5% by September. This has spilled over into markets around the world, even as China’s economy shows signs of rebounding strongly from lockdown. The dollar rose against its G10 counterparts and offshore yuan weakened after its largest advance since November. Oil steadied but remains set for a third day of gains on optimism over Chinese demand, while gold slipped. Fed officials reinforced their hawkish stance on Wednesday, calling for continued rate hikes to above 5% and expressing concern that the central bank's rate hikes are not slowing down the services sector.
- Asian stocks dropped after the S&P 500 closed near its lowest in six weeks.
- Swaps markets are pricing in a peak US policy rate of 5.5% in September, with some traders betting it may reach 6%.
- The good news from China is creating cyclical upside pressure, but this could lead to global inflation.
- Yields on Australian and New Zealand government bonds rose across the 2-year to 10-year maturities as Fed officials reinforced their hawkish stance. BM/DM

## Content

The drop in Asian stocks clawed back some of the sharp moves higher in Chinese equities earlier this week and came after the S&P 500 closed near the lowest in six weeks and as the 10-year Treasury yield [pierced](https://www.bloomberg.com/news/articles/2023-03-01/treasury-10-year-yield-tops-4-as-bets-on-fed-rate-peak-increase) the closely-watched 4% level.

Swaps markets are now [pricing](https://www.bloomberg.com/news/articles/2023-03-01/fed-swaps-price-in-peak-policy-rate-of-5-5-in-september) in a peak US policy rate of 5.5% in September, with some traders [betting](https://www.bloomberg.com/news/articles/2023-03-01/trader-doubles-money-on-big-6-fed-rate-bet-as-unwind-begins) it may reach 6%. That’s spilling over into markets around the world, even as China’s economy shows signs of rebounding strongly after exiting its Covid-Zero policy.

“The good news out of China is what the market has really needed at this point where globally we are seeing these inflation concerns not dying out,” Charu Chanana, senior markets strategist at Saxo Capital Markets, said on Bloomberg Television.

Yet she warned that this good news has a negative side in terms of global inflation: “The China reopening story adds cyclical upside pressure because of the sheer amount of demand that China can create.”

Yields on Australian and New Zealand government bonds rose across the 2-year to 10-year maturities in moves that largely tracked Treasuries. The 10-year Treasury remained just above 4% during Asian trading.

The dollar rose against its G10 counterparts after a gauge of greenback strength dropped 0.5% on Wednesday, the most in a month.

The offshore yuan weakened after being one of the most notable gainers versus the dollar Wednesday, when it rallied more than 1% in its largest advance since November.

The trigger for higher yields was Fed officials on Wednesday reinforcing their hawkish stance. Atlanta Fed’s Raphael Bostic called for [continued rate hikes](https://www.bloomberg.com/news/articles/2023-03-01/fed-s-bostic-urges-5-to-5-25-rates-into-2024-to-curb-inflation) to above 5% to make sure inflation doesn’t pick up again. Minneapolis Fed president Neel Kashkari, meanwhile, said he’s [concerned](https://www.bloomberg.com/news/articles/2023-03-01/fed-s-kashkari-open-minded-on-quarter-or-half-point-march-hike) that there isn’t much of an indication that the central bank’s rate hikes are slowing down the services sector.

Oil steadied, but remained set for a third day of gains on optimism over a revival in Chinese demand. Gold slipped. **BM/DM**