Asian Shares End On Muted Note; Chinese And Hong Kong Markets Rally

(RTTNews) - Asian stocks ended on a muted note Thursday after comments from a slew of Federal Reserve officials suggested that U.S. interest rates will keep climbing for some time to cool prices.

Investors were also reacting to U.S. President Joe Biden's State of the Union address where he warned the United States would act to protect itself should China threaten its sovereignty.

Chinese and Hong Kong markets posted strong gains, as some analysts upgraded growth forecasts for the world's second-largest economy this year, citing accelerating recovery in consumer spending.

China's Shanghai Composite index jumped 1.18 percent to 3,270.38 while Hong Kong's Hang Seng index gained 1.60 percent to settle at 21,624.36, snapping a two-day slide. Japanese shares recovered from an early slide to finish on a flat note. The Nikkei average ended marginally lower at 27,584.35 while the broader Topix index closed with a positive bias at 1,985.

Advantest, Screen Holdings and Tokyo Electron lost 1-2 percent after U.S. stocks fell sharply overnight, led by the tech-heavy Nasdaq. Materials maker Teijin and Pacific Metals both surged around 6 percent after posting upbeat quarterly results.

Seoul stocks snapped a two-day winning streak, with the Kospi average ending marginally lower at 2,481.52 on persistent uncertainty over interest rates and inflation.

Australian markets declined, dragged down by miners and financials. The benchmark S&P/ASX 200 dropped 0.53 percent to 7,490.30 while the broader All Ordinaries index closed 0.58 percent lower at 7,695.80.

Afterpay owner Block gave up 2.6 percent, Xero declined 2.4 percent and Zip shed 3.2 percent. AGL Energy plunged 10.3 percent after it slumped to a half-year loss of more than $1 billion.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 fell 0.76 percent to 12,118.67.

U.S. stocks fell overnight after New York Fed President John Williams said interest rates may need to be kept at an elevated level for a "few years" to bring down inflation.

Governor Christopher Waller warned of interest rates going higher than expectations while Governor Lisa Cook said the big job gains in January with moderating wage growth increased her hopes for a "soft landing".

The Dow slipped 0.6 percent, the S&P 500 dropped 1.1 percent and the tech-heavy Nasdaq Composite tumbled 1.7 percent.