Asian Equities Fell on Dampened Economic Outlook

Stocks fell on Wednesday as China struggles with surging COVID-19 infections and prospects of aggressive Federal Reserve monetary tightening points toward dampened economic outlook.

Shares in Mainland China is moderately higher while Hong Kong, South Korea and Japan is trading lower. The MSCI Asian Index ex Japan is trading higher by 0.12%.

In China, officials said they would step up infrastructure construction after a meeting Tuesday chaired by President Xi Jinping. The announcement is the latest pledge of economic support.

U.S. equity futures stabilized after the S&P 500 slid to a six-week low and the technology-heavy Nasdaq 100 plumbed levels last seen in 2021.

The dollar reached the highest level in nearly two years. Treasuries pared from sharp rally from Tuesday but the benchmark 10-year yield reached 2.73% remains lower for the week.

Meanwhile on the war in Ukraine front, Russia will cut off supplies to Poland and Bulgaria on Wednesday extending the threat to halt flows to countries that refuse to pay for the fuel in rubles.

“We know that sentiment is in a terrible state right now,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets LLC, said on Bloomberg Television.

“This is a market that’s very, very confused. There’s just a real lack of conviction in anything people want to buy at this moment in time.”

Crude oil pared loss with the WTI trading around $102 a barrel and the Brent trading around $105 a barrel.