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Asia stocks fall as global growth concerns mount

Asia stocks fall as global growth concerns mount © Reuters. FILE PHOTO: A man watches stock quotations on an electronic board outside a brokerage, in Tokyo, Japan, March 20, 2023. REUTERS/Androniki Christodoulou/File Photo

By Kane Wu

HONG KONG (Reuters) – Asia stocks fell on Wednesday after weak economic data in China and Europe heightened concerns over global growth, while the dollar firmed as investors weighed the outlook for U.S. interest rates.

MSCI’s gauge of Asia Pacific stocks outside Japan was down 0.5% at 0143GMT.

Australia’s fell 0.55% even as second-quarter gross domestic product beat forecasts with a 0.4% rise.

The and China’s benchmark CSI300 Index both opened down about 0.3%.

A private-sector survey on Tuesday showed China’s services activity expanded at the slowest pace in eight months in August, reflecting weak demand.

Manufacturing data from Germany, Britain and the euro area also showed declines, while their service sectors fell into contraction.

“The China decline was bigger than expected,” said Redmond Wong, Greater China market strategist at Saxo Markets.

“The Chinese government has become more active and is relaxing more regulation but whether it is good enough remains to be seen,” he added.

“The Europe data were rather weak. We think there is still a high chance to have a mild recession in the U.S. and Europe toward the end of the year or beginning of next year.”

Shares in Europe and the U.S. fell on Tuesday over concerns about weak global growth.

The yield on the benchmark U.S. 10-year Treasury note rose 9 basis points to 4.26% after reaching 4.268%, its highest since Aug. 25, while the U.S. dollar rose to a near six-month high against a basket of currencies.

Investors are digesting recent signals on potential U.S. interest rate hikes. Fed Governor Christopher Waller said on Tuesday that the latest round of economic data was giving the U.S. central bank space to see if it needs to raise rates again.

” () Fed is a focus for us, we think they have more work to do with potential for U.S. rates to continue heading higher,” said John Milroy, investment adviser at Ord Minnett.

was up 0.16% at $86.83 a barrel. gained 0.19% to trade at $91.21 a barrel.

fell 0.07% to $1,924.5 an ounce, after reaching its lowest since Aug. 1 on Tuesday.

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