By Ambar Warrick
Investing.com-- Asian stocks fell on Monday as concerns over U.S. curbs on Chinese semiconductor imports were worsened by a report that Apple (NASDAQ: AAPL ) was planning to drop Chinese chips, while fears of sharp interest rate hikes by the Federal Reserve also weighed.
China’s bluechip Shanghai Shenzhen CSI 300 index fell 0.4%, while the Shanghai Composite index lost 0.1%. Japanese financial daily Nikkei reported on Monday that iPhone maker Apple Inc has paused plans to use memory chips from China’s Yangtze Memory Technologies in its products.
The report comes just a week after the White House unveiled tighter restrictions on chip supplies to China, as it moves to apply more economic pressure on Beijing by stifling its chipmaking ambitions.
Chinese tech stocks fell severely last week on concerns over the economic implications of the move, as well as fears that Beijing could retaliate with its own sanctions, further damaging global trade.
Hong Kong stocks also fell sharply, given their exposure to U.S.-listed Chinese companies. The Hang Seng index fell more than 1%, with tech majors Baidu (NASDAQ: BIDU ) (HK: 9888 ), Alibaba (HK: 9988 ) and Tencent (HK: 0700 ) logging steep losses.
Sentiment towards China was further hit by President Xi Jinping stating that the country has no intention of scaling back its strict zero-COVID policy, which has severely disrupted economic activity this year.
But promises of more market-friendly policies helped limit losses in Chinese stocks.
Broader Asian markets fell on this notion, given that rising interest rates dent the earnings outlook for most sectors. Rising U.S. interest rates have weighed heavily on Asian stocks this year by tightening liquidity conditions and pushing up yields on low-risk debt.
Australian stocks fell as weakening prospects for China weighed on the country’s major mining stocks. BHP Group Ltd (ASX: BHP ) and Rio Tinto Ltd (ASX: RIO ) fell about 3% each, with focus also turning to their production reports for the September quarter, due this week.
The S&P/ASX 200 index fell 1.5%.
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