SYDNEY: Asian shares on Friday were headed for the worst month since the onset of the COVID-19 pandemic, while jitters in currency and bond markets persisted over hawkish talk from central banks, worries about global recession and rising geopolitical risk.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was largely flat on Friday, as a bounce in Hong Kong .HSI and among mainland Chinese bluechips .CSI300 offset declines elsewhere. Japan's Nikkei .N225 fell 1.6%.
Relief came from Chinese factory activity data that beat market expectations, with the manufacturing sector returning to growth in September after contracting for two months.
Still, the Asian index was set to record a staggering 12.5% drop for the month, the largest since March 2020 when the COVID-19 pandemic threw financial markets into chaos.
Hong Kong shares were likely heading for their worst quarter since 2001 and Chinese bluechips might also finish September by recording their biggest quarterly loss since a stock market meltdown in 2015.
"The 'troubling triad' of rising rates, slowing growth and strong dollar have all intensified," said Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs.
"We reduce our forecasts further and expect largely flat regional performance over the next two quarters with better returns on a 12-month view."
In currency markets, traders remained edgy amid risk of intervening from central banks.
The U.S. dollar =USD was little changed against a basket of major currencies at 111.88 on Friday, after retreating 0.9% in the previous day.
However, it is up 2.9% for the month, the best since April. The relentless rise of the dollar has pushed the Japanese yen, Chinese yuan and many emerging market currencies to record lows.
Traders are also wary of possible intervention from China and Japan. Reuters reported that China's central bank has asked major state-owned banks to be prepared to sell dollars for the local currency in offshore markets.
In Europe, Britain's gilt market has been roiled along with the pound GBP=D3 by government plans for heavy borrowing to finance spending.
Prime Minister Liz Truss said on Thursday she will stick to her plan to reignite economic growth, breaking her silence after nearly a week of financial market chaos.
German Chancellor Olaf Scholz also set out a 200 billion euro ($196 billion) "defensive shield", including a gas price brake and a cut in sales tax for the fuel, to protect companies and households from the impact of soaring energy prices.
That came as Europe braces for a double-digit inflation reading later in the day, as the European Central Bank voiced support for another big interest rate hike. German inflation accelerated to 10.9% this month, far beyond market expectations.
"Increased uncertainty and risks – and higher interest rates – logically see higher volatility in financial markets. Even G7 countries are now trading like emerging markets," said Jan Lambregts, head of global economics and markets research at Rabobank.
"Indeed, markets now also see a far wider range of possible outcomes when it comes to FX and rate movements."
U.S. Treasuries stabilised somewhat after a renewed bout of selling on hawkish talks from Federal Reserve officials, with the yield on 10-year bonds US10YT=RR up by 4 basis points in early Asia to 3.7815%.
The two-year Treasury yield US2YT=RR also rose a similar amount to 4.2048%.
A strong U.S. jobs market with weekly jobless claims hitting a five-month low adds to the case of more aggressive tightening from the Fed. Overnight hawkish comments from Fed officials offered no indication that recent foreign exchange and bond market drama will lead the central bank to back off from its rate hike course.
Further weighing on market sentiment, Russian President Vladimir Putin will begin annexing four Ukrainian regions to his country on Friday, a move the United Nations said would mark a "dangerous escalation" and jeopardise prospects for peace.
Oil prices were little changed in early trade on Friday. U.S. crude CLc1 ticked up 0.11% to $81.32 a barrel while Brent crude LCOc1 rose to $88.51 per barrel.
Gold was slightly higher. Spot gold XAU= was traded at $1663.29 per ounce. GOL/
Reuters
Fri Sep 30 2022
![Asian shares head for worst month since pandemic started Asian shares head for worst month since pandemic started](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2022-09/51664504433_japan.jpg)
People pass by an electronic screen showing Japan's Nikkei share price index inside a conference hall in Tokyo, Japan June 14, 2022. REUTERS/Issei Kato/File Photo
Tumpuan Isnin – 08 Julai 2024
Ikuti rangkuman berita utama yang menjadi tumpuan di Astro AWANI.
'Jeff' dinobat siput terpantas dunia, menang Kejohanan Dunia Lumba Siput
Tahun ini, siput bernama Jeff dinobatkan sebagai pemenang, menang saingan akhir dengan masa 4 minit dan 3 saat. Begitupun, kepantasan Jeff tidak dapat memadam rekod yang dibuat pada tahun 1995 oleh seekor siput bernama Archie.
![Pentadbiran Prabowo-Gibran dijangka perkukuh industri sawit Indonesia Pentadbiran Prabowo-Gibran dijangka perkukuh industri sawit Indonesia](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-07/81720368598_TBPrabowo.jpg)
Pentadbiran Prabowo-Gibran dijangka perkukuh industri sawit Indonesia
Kerajaan baharu yang akan dipimpin oleh Prabowo Subianto-Gibran Rakabuming Raka dijangka memperkukuh daya saing produk minyak sawit sebagai komoditi strategik untuk pasaran domestik dan antarabangsa.
![Kanak-kanak lelaki maut selepas terjatuh ke dalam tasik Kanak-kanak lelaki maut selepas terjatuh ke dalam tasik](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-01/61706067730_TBgarisanpolis.jpg)
Kanak-kanak lelaki maut selepas terjatuh ke dalam tasik
Seorang kanak-kanak lelaki berusia sembilan tahun maut selepas terjatuh ke dalam tasik dipercayai ketika sedang mencari lokan di Taman Tasik Teratai Fasa 2 Serendah, Hulu Selangor.
Ribuan umat Islam zahir solidariti kepada Palestin di Shah Alam
Bertemakan Gaza Bangkit, program pada Ahad malam itu turut mengundang pendakwah dari Indonesia, Ustaz Abdul Somad Batubara untuk menyampaikan ceramah.
NGO, belia perlu ambil iktibar peristiwa hijrah - PM
Perdana Menteri, Datuk Seri Anwar Ibrahim menyeru pertubuhan bukan kerajaan dan gerakan belia mengambil iktibar daripada peristiwa Hijrah Nabi Muhammad SAW untuk mengembalikan kegemilangan negara.
Kehadiran ATM di Timur Sabah berikan keyakinan masyarakat setempat
Kehadiran pasukan Angkatan Tentera Malaysia (ATM) di Timur Sabah meningkatkan keyakinan masyarakat setempat serta merancakkan lagi pembangunan sektor pelancongan, ekonomi dan sosial di kawasan itu.
![Berita tempatan pilihan sepanjang hari ini Berita tempatan pilihan sepanjang hari ini](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2023-12/61703329565_TBBERITAx.jpg)
Berita tempatan pilihan sepanjang hari ini
Berikut adalah berita yang paling menjadi tumpuan sepanjang Ahad, 7 Julai 2024.
![Berita antarabangsa pilihan sepanjang hari ini Berita antarabangsa pilihan sepanjang hari ini](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/https://img.astroawani.com/2024-03/71709993909_TBBERITAx.jpg)
Berita antarabangsa pilihan sepanjang hari ini
Berikut adalah yang paling menjadi tumpuan sepanjang Ahad, 7 Julai 2024.
Enam cedera hari pertama Festival Larian Lembu di Sepanyol
Meskipun ada yang cedera, acara tersebut sentiasa mendapat perhatian dan tahun ini, ratusan orang mengejar enam ekor lembu jantan di bandar itu.
![Asia stocks flirt with historic highs on global growth cheer Asia stocks flirt with historic highs on global growth cheer](https://resizer-awani.eco.astro.com.my/tr:w-177,h-100,q-100,f-auto/http://img.astroawani.com/2018-01/41514957475_japaneconomy.jpg)
Asia stocks flirt with historic highs on global growth cheer
Investors also piled into emerging market trades, delivering a record peak for Philippine stocks, a 24-year top for Thailand and a decade-high for Hong Kong.