By Gina Lee

Investing.com – Asia Pacific stocks were mostly down on Wednesday morning, as a combination of mixed corporate earnings, the latest COVID-19 outbreak in China, and the prospect of aggressive U.S. Federal Reserve monetary policy all indicated a deteriorating economic outlook and dampened investor sentiment.

Japan’s slid 1.84% by 10:30 PM ET (2:30 AM GMT) and South Korea’s fell 1.26%.

Australia saw the 0.66% drop, while the 2.1% growth and 5.1% increase in the first quarter 2022.

Hong Kong’s fell 0.73%.

China’s was down 0.45% while the edged up 0.12%.

Australian and New Zealand sovereign bonds were supported by the ongoing risk-aversion. U.S. Treasuries suffered a modest rally Tuesday, which was driven by shorter maturities. U.S. equity markets were in a tepid state after falling to a 6-week low, and then plummeted to levels not seen since 2021.

Concerns are also growing that Russia could halt gas flows to Europe and impact the bloc’s economic growth. Russia will fulfill its threats to stop fuel flows to those countries refusing to pay in Russian rubles by cutting supplies to Poland, and Bulgaria on Wednesday.

The ongoing fallout from Russia’s invasion of Ukraine on Feb. 24 saw the euro hit its weakest level versus the greenback since 2017. The $102 mark was reached for oil, and the gold mark hovered around $1,905. Gold lost around $38,100.

Earnings from Alphabet Inc., Texas Instruments Inc. (NASDAQ :), and others also disappointed investors. This further dampened the market outlook. Earnings Microsoft Corp . (NASDAQ.) In late trading, sentiment was lifted somewhat by better-than expected results. Investors now wait for tech earnings from companies like Meta Platforms Inc. and Amazon.com Inc.

This lowered investor sentiment already affected by tighter Fed Monetary Policy and a slowdown economic in China.

“We know that sentiment is in a terrible state right now,” RBC Capital Markets LLC head of U.S. equity strategy Lori Calvasina told Bloomberg.

“This is a market that’s very, very confused. There’s just a real lack of conviction in anything people want to buy at this moment in time.”

It will deliver its monetary policy determination on Thursday. Later in the day, European Central Bank’s economic bulletin will be issued. On Thursday, the U.S. will release data including for the first quarter 2022.

Elsewhere in Asia Pacific, China said it would step up infrastructure construction after Tuesday’s Central Committee for Financial and Economic Affairs meeting chaired by President Xi Jinping. This is the government’s latest show of economic support as COVID-19-related lockdowns continue in parts of Shanghai and Beijing continues mass testing for the virus.