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Asia-Pacific equities were broadly lower for a second day, with financial stocks in the region logging sizable declines as investors assessed the rising interest-rate environment.
The Federal Reserve this week signaled it remains on track to raise interest rates gradually, while weak eurozone inflation on Thursday raised questions about how soon the European Central Bank would start tightening monetary policy.
Shares of major banks in Hong Kong and South Korea fell more than 2% Friday. Standard HSBC and Bank of China were at least 1.5% lower. The S&P 500 financial sector dropped 0.9% in the U.S. on Thursday.
Hong Kong stock indexes continued to lag behind on Friday. CMC Markets sales trader Oriano Lizza attributed the declines to jittery investment flows from China and worries about U.S.-China trade tensions, noting that there was also speculation about Chinese money being rerouted to invest in coming initial public offerings in the mainland.
The Hang Seng Index , which has fallen in six of the past nine trading days, was 0.4% lower at midday and on pace for its sixth weekly drop in the past seven weeks.
In addition, the $1.1 billion IPO of Ping An Healthcare proved uneventful, as shares rose 1.4% compared with big first-day jumps from some smaller Hong Kong debuts in recent months.
South Korea’s Kospi fell 0.7% because of weakness in financial stocks and a near-2% drop by index heavyweight Samsung Electronics , which had its first trading action after undergoing a 50-for-1 stock split. SK Hynix , another chip maker, declined 4.5% this week.
Financial stocks were also under pressure in Singapore, as the sector continued its post-earnings softness after rallying to fresh records and pushing the Straits Times Index to 10 ½-year highs. The index was recently down 0.7%.
Declines also persisted in Indonesia, whose stock benchmark hit nine-month lows Friday. The JSX Composite Index fell 0.8%.
In Australia, credit-market concerns sent yield-sensitive utilities stocks down 1.3%, pushing the S&P/ASX 200 index 0.5% lower. The benchmark index is poised to end a five-day winning streak.
Following muted moves on Wall Street overnight, market sentiment in Asia was broadly cautious as investors awaited the U.S. April employment report.
“Global risk appetite may remain sidelined today, notwithstanding fairly positive U.S.-China trade talk,” OCBC Bank said in a research note. S&P 500 futures were recently flat.
According to Tareck Horchani, head of APAC sales trading at Saxo Bank, equities “could see a short-term bounce” if U.S. job growth comes in weak, as that would likely ease concerns about a faster pace of rate increases.
Japanese markets remained closed for a holiday. Currency and commodity markets across Asia were little changed.
Bitcoin bounced Thursday in the U.S. to move back toward $10,000, according to CoinDesk. The cryptocurrency hasn’t reached that point in two months.