A fresh sell-off hit Asian equities on Wednesday as concerns over a stronger dollar and rising global interest rates added to pressure on capital flows.
The MSCI Asia Pacific Index dropped as much as 1.8% to its lowest since May 2020 as most sectors were in the red. Tech shares led declines, given the sector’s sensitivity to higher borrowing costs and the global economy. Benchmarks in Taiwan, Hong Kong and South Korea fell the most, with the former two edging toward a 2% slide.
The “strong dollar is never good news for Asian markets,” Sanford C. Bernstein strategists including Rupal Agarwal wrote in a note late Tuesday. “It tends to increase the cost of foreign debt, results in higher capital outflows and puts pressure on central banks to maintain the attractiveness of their exports and the yield spreads.”
