By Gina Lee
Investing.com – Asia Pacific stocks mixed on Friday morning, attempting to turn a new leaf after their worst quarter since the COVID-19 bear market. Investors continue to weigh the risks from tighter U.S. Federal Reserve monetary policy and the war in Ukraine.
China’s Shanghai Composite was up 0.34% by 10:43 PM ET (2:43 AM GMT) while the Shenzhen Component was up 0.41%. The Caixin manufacturing purchasing managers index (PMI) for March was 48.1, with National Bureau of Statistics data from the day before showing that the manufacturing PMI was 49.5 and the non-manufacturing PMI was 48.4.
Hong Kong’s Hang Seng Index fell 0.76%.
Japan’s Nikkei 225 was down 0.43%, with data showing the Tankan Large Manufacturers Index at 14, and the Tankan Large Non-Manufacturers Index at 9, for the first quarter of 2022.
South Korea’s KOSPI was down 0.55%.
In Australia, the ASX 200 edged up 0.16%, with March’s Australian Industry Group manufacturing index at 55.7 and the manufacturing PMI at 57.7.
China’s worst COVID-19 outbreak since the start of the pandemic prompted the city of Shanghai to extend a lockdown and a retreat in U.S.-listed Chinese stocks is also dampening sentiment.
The U.S. plan to release around a million barrels a day from the strategic petroleum reserve is also keeping oil prices down. Russia’s invasion of Ukraine on Feb. 24 has disrupted commodity supplies, ramping up prices for fuel and food. Russia will aim to keep supplying gas to European customers even as it demands they shift to payment in Russian rubles.
Ukraine and Russia will resume peace talks on Friday. The Russian government is also staying on top of its debt obligations so far, with JPMorgan Chase & Co. (NYSE:JPM) processing a nearly $447 million payment for dollar debt due in 2030 on Thursday. The next payment deadline is April 4.
U.S. Treasuries fell, with the curve between two-year and 10-year yields remaining close to inverting. Combined with the Fed’s hawkish approach, concerns about an economic downturn are increasing. The USD/JPY on the first day of Japan’s new fiscal year, after its more-than-5% drop in the first quarter.
Investors are still weighing the impact of the war in Ukraine, Russia's isolation, and the Fed’s tighter monetary policy on market volatility and further losses for stocks and bonds within the year. Raw materials are the only key asset class that has recorded major gains in 2022 to date.
Downgraded growth outlooks in the U.S., Europe, and China are “something to watch very carefully,” Columbia Threadneedle Investments head of multi-asset strategy Anwiti Bahuguna told Bloomberg. “There are very few places to hide these days in the multi-asset space,” though commodities are a good spot because of inflation and geopolitics, she added.
Thursday’s U.S. data also showed that February’s personal consumption expenditures price index grew 6.4% year-on-year, the most since 1982, and grew 0.6% month-on-month. The latest U.S. jobs report, including non-farm payrolls, is due later in the day.