By Ambar Warrick

-- Most Asian stocks sank on Tuesday as fears of rising U.S. interest rates continued to batter regional sentiment, although markets held out for data this week that could signal a Chinese economic recovery.

China’s and indexes fell 0.1% each ahead of a reading on the (PMI) on Wednesday. While the data is expected to show some improvement in February from the prior month, the country’s - which acts as a bellwether for economic growth - is likely to remain close to contraction.

A Chinese economic recovery is expected to spill over into broader Asian markets. But readings so far have painted a mixed picture of the Chinese economy, even as the country relaxed most anti-COVID measures earlier this year.

China’s per capita spending also fell 0.2% in 2022, data showed on Tuesday, as COVID restrictions ground economic activity to a halt. 

Hong Kong’s index slipped 0.4% after data showed on Monday that the country’s plummeted nearly 37% in January - their worst drop in 70 years. The reading shows that the country’s economy and its export-oriented peers may be facing growing headwinds from a slowdown in global demand. 

The index sank 0.7%, also taking cues from the weak export data. 

Broader Asian stock markets extended losses on Tuesday, as fears of a hawkish Fed persisted following hotter-than-expected data last week. Focus this week is on more U.S. economic readings, with any signs of resilience giving the Fed more headroom to keep raising interest rates.

Rising interest rates bode poorly for Asian stocks, given that they dent foreign capital flows into the region. 

India’s and indexes fell 0.1% each, with heavyweight technology stocks remaining under pressure from Fed jitters. Markets are awaiting December quarter from the country later in the day, with growth expected to have slowed from the prior quarter.

Shares of firms under the Adani Group bounced back from sharp losses in the prior session, with Ltd (NS:) rising over 8%.

Japan’s index was flat as data showed in the country slowed sharply in January. Markets are awaiting more cues from the Bank of Japan on the path of monetary policy.

Risk-heavy Southeast Asian markets recovered sharply from losses in the prior session, but remained within a trading range seen earlier this month.