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Asian Stocks Take a Beating Amid Fed Fears and Chinese Recovery Uncertainty

Asian Stocks Fall as US Inflation Data and Chinese Economic Indicators Fuel Fed Rate Hike Fears.

On Monday, Asian stock markets experienced a decline due to concerns over rising interest rates and a hawkish Federal Reserve triggered by stronger-than-expected US inflation data. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell by approximately 0.2%, with the focus shifting to a forthcoming reading on the Purchasing Managers’ index to be released on Wednesday, which is expected to show a mixed recovery in Chinese business activity.

Southeast Asian stocks, including the Philippines, suffered the most during the day, and Australia's ASX 200 index fell over 1% due to losses in BHP Group Ltd and Rio Tinto Ltd. Tech-heavy bourses also experienced losses, with the Taiwan Weighted index and South Korea’s KOSPI falling by 0.7% and 1.2%, respectively, while Hong Kong's Hang Seng index fell by 0.3%.

The Personal Consumption Expenditures index, the Federal Reserve's preferred inflation gauge, grew more than expected in January, which has given the Fed more headroom to raise interest rates. The reading, which was released on Friday, espoused a bearish outlook for Asian markets, pushing up the dollar and Treasury yields and drawing capital flows out of Asian stocks and into relatively safer bets.

India's Nifty 50 and BSE Sensex 30 indexes also fell by about 0.8% each, with technology and industrial stocks weighing the most. Adani Enterprises Ltd slumped over 5% following reports of the firm's intention to raise up to $400 million in debt, despite a recent short sellers report expressing concerns over its stretched debt position.

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