By Ambar Warrick

--Most Asian stocks plummeted on Friday as a sharp selldown in U.S. bank stocks spilled over from overnight trade, with markets also turning largely risk-off ahead of key nonfarm payrolls data.

Most Asian markets were also set for sharp weekly losses, as a string of weak Chinese economic readings dented sentiment towards the region.

Hong Kong’s index was the worst performer in Asia on Friday, down 2.5% on losses in heavyweight technology stocks, while Australia’s fell 2.2% as the country’s “big four” banks logged steep losses. 

The was also the worst performer this week, down nearly 6%. 

Japan’s index fell 1.7%, even as the at record lows and signaled no changes in its quantitative easing and yield curve control measures. But the Nikkei was the only Asian index trading positive for the week, having gained on the prospect of monetary conditions remaining accommodative in the country. 

Investors on Thursday after silicon valley start-up lender SVB Financial Group (NASDAQ:) said it was undertaking aggressive measures- including equity sales and the liquidation of its securities portfolio, to support its balance sheet. 

The move added to fears of a similar trend in other banks, which are facing increasing pressure from a deepening yield curve inversion. But losses in U.S. stocks became broad-based as markets feared more market headwinds from U.S. interest rates remaining higher for longer.

Focus is now squarely on data due later in the day, with any signs of resilience in the jobs market giving the Federal Reserve more headroom to keep raising rates. 

The prospect of higher interest rates bodes poorly for Asian markets, as regional liquidity conditions tighten and as foreign capital flows into the region dry up.

Concerns over a mixed economic recovery in China also dented regional markets, following weaker-than-expected and data for February. Weakness in China has weighed heavily on regional economies that depend on the country as a trading partner.

China’s and indexes lost 1.1% each on Friday, and were set to lose about 4% and 2.7%, respectively, this week. 

Losses in major bank stocks also dragged India’s and indexes about 1.3% lower, while Ltd (NS:) sank 4.3%, with investors continuing to lock in profits after the stock rallied for six consecutive sessions before Thursday.