By Ambar Warrick

Investing.com-- Asian stock markets fell further on Friday and were headed for deep weekly losses as rising interest rates across the globe threatened to destabilize economic growth and weighed on risk appetite.

South Korea’s KOSPI index was among the worst performers for the day, down 1.8%, while Hong Kong’s Hang Seng index shed 1.1%. Hong Kong stocks were also the worst performers this week, losing 4.2% as their high exposure to technology saw them bear the brunt of selling pressure.

Sentiment towards regional stock markets was decimated this week after the U.S. Federal Reserve raised interest rates and flagged a more aggressive stance towards combating inflation.

The central bank is now willing to risk headwinds to economic growth and the labor market from rising rates, indicating that more steep rate hikes are on the horizon. The move boosted the dollar and Treasury yields, drawing capital away from risk-driven assets.

Rising U.S. interest rates have been a key source of pressure on Asian stock markets this year, drying up the high amounts of liquidity enjoyed through the last two years. Rate hikes by other major central banks, including the Bank of England and the European Central Bank, have also weighed.

The Fed’s move put Asian stock markets on course for a fourth straight week of losses, mirroring a similar trend on Wall Street. Technology stocks were the worst hit, as rising interest rates saw investors discount future earnings from the sector.

China’s bluechip Shanghai Shenzhen CSI 300 index fell 0.9%, while the Shanghai Composite lost 1.1%. Both indexes were set to lose 2.5% and 1.8%, respectively, this week, amid continued concerns over a slowdown in China’s economy.

Australia’s S&P/ASX 200 index tumbled 2.2% in catch-up trade after a holiday on Thursday. The index was also set to lose about 2.5% this week.

In Southeast Asia, Philippine stocks fell 0.9% after the central bank hiked interest rates as expected on Thursday, but signaled more monetary tightening to combat heightened inflation.

Indonesian stocks fell 0.4% after the central bank raised rates by more than expected on Thursday.

Related Articles

Asian Stocks Extend Losses as Rate Risks, Recession Fears Persist

Daimler Truck begins producing Mercedes-Benz branded trucks in China

CEO of Italy's MPS pressured to seek partners' support for cash call