Shares in the Asia-Pacific were mostly lower on Friday, the last day of the third quarter, following another sell-off on Wall Street overnight. China's official factory activity data unexpectedly expanded in August, beating estimates.
The Hang Seng index in Hong Kong was 0.27% higher in the final hour of trade, while the Hang Seng Tech index dropped 1.05%. Mainland China's Shanghai Composite shed 0.55% to 3,024.39, and the Shenzhen Component was 1.29% lower at 10,778.61.
The Kospi in South Korea declined 0.71% to 2,155.49 and the Kosdaq shed 0.36% to 672.65. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.11%.
U.S. stocks tumbled in Thursday's session, with the S&P 500 hitting a fresh low for the year and also reaching a new closing low. The index dropped 2.1% to end the session at 3,640.47. Meanwhile, the Dow Jones Industrial Average slumped 458.13 points, or 1.54%, to 29,225.61. The tech-heavy Nasdaq Composite lost 2.84% to 10,737.51.
"Geopolitical and inflation risks are not subsiding, and risk assets are taking the strain as expectations of lower growth and higher funding costs continue to permeate," analysts at ANZ Research wrote in a Friday note.
— Sarah Min and Samantha Subin contributed to this report.
CNBC Pro: Iron ore demand is about to collapse in October, UBS says. Here's how to trade this.
Demand for iron ore in China rose earlier this month, but the Swiss bank UBS says it's a "short-lived" lift that will collapse next month.
The UBS research also said iron ore demand had already weakened globally as pig iron production, an intermediate product in steel making, had fallen by 7% compared to last year in August.
The investment bank named four mining companies exposed to the commodity that are likely to be impacted by the upcoming change in demand.
— Ganesh Rao
Chinese yuan strengthens on report that the PBOC asked state banks to support the currency
The Chinese yuan strengthened against the U.S. dollar, extending gains for a second straight session after Reuters reported the central bank has asked state banks to support the currency.
The onshore yuan strengthened to 7.0945 per dollar in Asia's afternoon, while the offshore yuan stood at 7.0907 against the greenback.
The People's Bank of China warned speculators not to bet on the yuan in either direction earlier this week.
— Abigail Ng
Reserve Bank of India hikes rates by 50 basis points
India's central bank raised its benchmark interest rate by 50 basis points to 5.9%, in line with expectations of analysts polled by Reuters
The fourth consecutive increase comes as consumer inflation in the country hit 7% in August and the currency's weakened to record levels.
Central banks in Asia have been raising rates in line with the U.S. Federal Reserve.
— Abigail Ng
Japan movers: Softbank, Nintendo, Toyota fall
Shares of Softbank fell around 2% after sources confirmed reports that the company is planning to cut at least 30% of its Vision Fund staff.
Nintendo also shed more than 3% after the company carried out a 10-for-1 stock split aimed at reducing the price of one individual share to attract new investors.
Meanwhile, Toyota fell more than 3% along with other auto companies in Japan, after its CEO Akio Toyoda reiterated the company's strategy for electric vehicles production, despite criticism it's not moving fast enough.
Other companies such as Nissan, Mitsubishi Motor, Mazda Motor all fell more than 5% in the morning session.
— Jihye Lee
Apple suppliers in Asia fall after analyst downgrade
Shares of most Apple suppliers in the region fell sharply after Bank of America downgraded its outlook for the company to neutral and slashed its price target on macroeconomic challenges ahead.
South Korea's Samsung SDI fell 2.83%, while SK Hynix and Samsung Electronics rose.
Overnight in the U.S., Apple's shares fell nearly 5%, sparking a sell-off among large tech companies.
— Abigail Ng
China reports better-than-expected factory activity for September
China's official manufacturing Purchasing Managers' Index surprisingly grew in September to 50.1, much higher than the 49.6 predicted by analysts in a Reuters poll.
The 50-point mark separates growth from contraction. PMI prints compare activity from month to month.
Meanwhile, the Caixin/S&P Global manufacturing Purchasing Managers' Index, a private survey of factory activity — reported a contraction with a reading of 48.1.
"Subdued demand conditions and lower production requirements led firms to cut back on their purchasing activity in September, with the rate of decline the quickest in four months," the Caixin press release said.
The official non-manufacturing PMI came in at 50.6 in September, down from 52.6 in August.
— Abigail Ng
Factory activity in China expected to contract again
China's official manufacturing Purchasing Managers' Index for September is expected to come in below the 50-point mark separating growth from contraction, according to a Reuters poll of analysts.
Economists expect a figure of 49.6, slightly higher than August's 49.4, which would mark the third consecutive month of contraction.
PMI readings are sequential and represent month-on-month expansion or contraction.
A private survey of Chinese factory activity is also due on Friday, and analysts polled by Reuters predict that the print will come in at 49.5.
— Abigail Ng
Japan's industrial production rises more than expected
Industrial production in Japan grew 2.7% in August from July, according to official data, marking the third consecutive month of growth. That figure soundly beats expectations of a 0.2% increase in a Reuters poll.
Retail sales also jumped 4.1% in August compared with a year ago, beating a Reuters forecast of a 2.8% rise.
— Abigail Ng
CNBC Pro: Is the Fed on the right track? Wall Street veteran Ed Yardeni says this is what it should do next
The U.S Federal Reserve announced yet another 75 basis point hike earlier this month, sending the federal funds rate up to a range of 3% to 3.25%. The central bank also signaled it may raise interest rates up to as high as 4.6% in 2023 to control inflation.
Ed Yardeni, the economist who coined the term "bond vigilantes," gives his take as the Fed's response to inflation comes under intense scrutiny.
Pro subscribers can read more here.
— Zavier Ong
Fed's Loretta Mester says interest rates are not yet restrictive
Cleveland Federal Reserve President Loretta Mester said interest rates are not yet restrictive, and there's more to be done to bring down inflation.
"Inflation is still at a 40 year high," Mester told CNBC's Steve Liesman during an appearance on "Squawk Box." "So right now the conversation has to be we have to do, what we must do to get back to price stability, because we can't have a healthy economy, we can't have good labor markets over time, unless we get back to price stability."
Mester said she's probably "a little bit above the median path" among Fed officials when it comes raising interest rates, citing the persistence in inflation.
"We're still not even in restrictive territory on the funds rate, so you're right, we've moved the funds rate up 300 basis points this year, but look how high inflation is," Mester said.
— Sarah Min