Asian Stock Market: Extend losses as US recession fears soar, oil seeks support, China CPI eyed

• Indices display bearish moves as US recession fears have spooked investors’ sentiment.
• A decline in China’s inflation could compel the PBOC to ease policy ahead.
• The oil price has displayed a pullback move after registering a fresh annual low at $72.00

Markets in the Asian domain have carry-forwarded weakness on Thursday as United States recession fears have soared. As the US sneezed, Asian indices have caught the cough. S&P500 remained choppy on Wednesday after two consecutive bearish sessions. The risk aversion theme is still solid as the Federal Reserve (Fed) is set to hike interest rates further next week. Also, higher interest rate guidance is expected from Fed chair Jerome Powell in December monetary policy meeting.

At the press time, Japan’s Nikkei225 dropped 0.69%, ChinaA50 slipped 0.30%, however, Hang Seng jumped 2.71%.

Chinese equities are facing pressure as investors are shifting their focus toward the Consumer Price Index (CPI) data, which will release on Friday. As per the projections, a decline is expected in the annual CPI figure to 1%. An occurrence of the same will force the People’s Bank of China (PBOC) to look for policy easing to spur growth in the economy.

Meanwhile, Japanese indices are facing immense pressure despite better-than-anticipated Gross Domestic Product (GDP) data. The annualized data has contracted by 0.8% vs. expected contraction by 1.1% and the prior release of -1.2%. While the quarterly data has contracted by 0.2% against the consensus and the prior release of 0.3% contraction.

Figures are upbeat than expectations but the growth rate is still contracting, which calls for more economic stimulus from the Bank of Japan (BOJ). This has triggered fears of a decline in inflation ahead.

On the oil front, West Texas Intermediate (WTI) has shown a pullback move from a fresh annual low at $72.00. The oil prices have been impacted by US recession fears. Bank of America (BoA) CEO Brian Moynihan told investors at a Goldman Sachs financial conference that the United States economy will show "negative growth" in the first part of 2023, but the contraction will be "mild."