Amid uncertainty regarding early rate reduction, Asian equities mirrored Wall Street's losses

The overnight session saw a sharp decline in most Asian equities, following Wall Street's overnight losses as investors questioned the Federal Reserve's early rate-cutting projections. This was particularly true ahead of this week's other important economic indicators.

Following the announcement of disappointing official purchasing managers index readings earlier this week, worries about China's slowing GDP persisted. Additionally, the Chinese government reduced its 2022 GDP estimate, which may portend a dismal 2023 GDP estimate.

Shanghai Shenzhen CSI 300 dropped 0.2% and hovered at a five-year low as the Shanghai Composite index moved in a sideways pattern. In 2023, both indices saw significant losses.

Following a collapse in U.S. majors, broader Asian markets tumbled on Wednesday, with the technology sector suffering the worst losses.

In Asia, tech-heavy indices underperformed. The KOSPI in South Korea fell 1.7%, and the Hang Seng index in Hong Kong decreased 1.1%.

Losses at significant Apple suppliers also affected Asian stock markets, after Barclays downgraded the iPhone manufacturer due to an impending downturn in device sales.

The expectation of the Fed's December meeting minutes, which were scheduled to be released later on Wednesday, also put pressure on tech stocks.

Experts cautioned that the minutes might not have the dovish effect that investors had hoped for. The Fed had provided clues about the timing of rate decreases in 2024, even though it had already signalled such moves.

Up until December, substantial gains had been seen in global stock markets due to expectations of early interest rate decreases. However, this also left stock markets open to a precipitous decline in response to scepticism over the initial rate reduction.

(Sources: investing.com, reuters.com)