Most Asian stocks retreated on Tuesday, extending recent losses as persistent concerns over slowing economic growth and high U.S. interest rates largely offset a bigger-than-expected cut in China’s benchmark lending rate.

Chinese markets fell slightly after a largely underwhelming return from the week-long Lunar New Year holiday, while a bigger-than-expected cut in the five-year loan prime rate failed to inspire confidence.

The bluechip Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.3% and 0.1%, respectively, while losses in mainland stocks dragged Hong Kong’s Hang Seng index down 0.4%. All three indexes remained largely in sight of 2024 lows.

The People’s Bank of China cut its 5-year LPR, which is used to determine mortgage rates, by a bigger-than-expected 25 basis points to 3.95%, putting the rate further into record-low territory.

But the move only pointed to more monetary support for the Chinese economy, and came amid increasing calls from investors for Beijing to roll out more targeted, fiscal measures.

Chinese stocks were the worst performers in Asia through 2023, and saw little relief in 2024 amid persistent concerns over a slowing Chinese economic recovery.

Concerns over China weighed on sentiment towards broader Asian markets.

Japan’s Nikkei 225 fell 0.1%, pulling back further from 34-year highs, while South Korea’s KOSPI lost 1.1%, with both indexes coming under pressure from losses in technology stocks.

Tech was a key driver of recent stock market gains, particularly in the U.S., as hype over artificial intelligence saw traders piling into the sector. But the AI-fueled rally faces a key test this week from fourth-quarter earnings from NVIDIA Corporation (NASDAQ:NVDA), which is at the heart of an AI-driven valuation boom.

Wall Street was closed on Monday for a holiday. S&P 500 Futures, Nasdaq 100 Futures and Dow Jones Futures all fell about 0.3% in Asian trade.

Australia’s ASX 200 fell 0.2% as the minutes of the Reserve Bank of Australia’s February meeting showed that the central bank had considered a rate hike, amid persistent concerns over sticky inflation.

Futures for India’s Nifty 50 index pointed to a muted open, after the index recovered a measure of recent losses on Monday.

Most Asian markets were still reeling from concerns over higher-for-longer U.S. interest rates, especially following a series of hot inflation readings from last week. Several Federal Reserve officials also signaled that the bank was largely inclined towards keeping rates higher in the near-term.

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