<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets Global currencies vs. dollar Emerging markets MSCI All Country World Index Market Cap ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Selena Li; Editing by Bradley Perrett)
By Selena Li
HONG KONG, Feb 22 (Reuters) - Asian share markets
followed Wall Street into the red on Wednesday as surprising
strength in global surveys of services stoked fears that central
banks would have to lift interest rates yet further and keep
them up for longer.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.97%, after Wall Street posted its worst
performance of the year on Tuesday, with an unexpectedly strong
reading of S&P Global's composite purchasing managers' index
(PMI) showing the U.S. economy was not cooling yet.
"The flow of economic data surprises has continued overnight
and this time it was a uniformly stronger than expected
performance of the services sector across major developed market
economies," National Australia Bank analysts wrote in a client
note.
"It concerns the market that central banks will have to hike
rates a lot more to curb inflation," said Kerry Craig, JPMorgan
Asset Management's global market strategist.
New Zealand's central bank raised interest rates by 50 basis
points to a more than 14-year high of 4.75% on
Wednesday. The central bank said it expected to keep tightening further
to ensure inflation returned to its target range over the medium
term.
The Bank of Japan said on Wednesday it would conduct
emergency bond buying, in a move to contain elevated yields, as
the 10-year JGBs touched 0.505% for a second
straight session, breaching the BOJ's 0.5% cap and reaching the
highest level since Jan. 18. Japan's Nikkei share index fell 1.25% on Wednesday
following a Tuesday PMI report showing the factory sector had
contracted.
China's benchmark shed 0.68% and Hong Kong's Hang
Seng index dropped down 0.27%.
Australia's S&P/ASX 200 index lost 0.25% in early
trading, falling for a second straight session and touching its
lowest in more than a month on expectations of interest rate
rises. U.S. 10-year notes touched 3.966%, the highest
since November, before easing to yield 3.9389% on Wednesday.
The dollar index fell 0.077%, but analyst expect
interest rate rises to lift the dollar, hurting emerging market
equities, which benefited from a falling dollar.
U.S. crude fell 0.5% to $75.98 per barrel and Brent was at $82.68, down 0.45%.
Spot gold added 0.1% to reach $1,836.18 an ounce.
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