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BEIJING/HONG KONG: Asian shares tracked a global equities sell-off on Friday as rate hike guidance from the European Central Bank and jitters over upcoming US inflation data stoked concerns about global growth, while stocks in China rose on hopes of policy loosening, according to Reuters.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9 percent, weighed down by a 1.2 percent drop in resources-heavy Australia and a 1.5 percent retreat in South Korea. Japan’s Nikkei fell 1.4 percent.

The fall is set to continue when the European markets open. The pan-region Euro Stoxx 50 futures fell 0.99 percent, German DAX futures were 0.92 percent lower, FTSE futures dropped 0.87 percent.

However, continued strong buying by foreign investors and cautious hopes of regulatory easing on tech firms lifted China stocks on Friday, despite news that the cities of Beijing and Shaanghai were back on COVID-19 alert.

China’s blue-chip CSI300 index was up 0.41 percent, while Hong Kong shares trimmed earlier losses to be off 0.2 percent.

Tech giants listed in Hong Kong, which took a heavy hit in early trade, reversed losses to be up 0.9 percent, driven by a change of fortunes in Hong Kong shares of Alibaba , which rose 1.8 percent.

Reuters reported that Chinese authorities has given billionaire Jack Ma’s Ant Group a tentative green light to revive its initial public offering, following a Bloomberg story that China is considering reviving the IPO.

Despite denials from the company and the securities regulator, investors took it as a sign that a long regulatory crackdown on tech firms is easing, in line with the broad accommodative stance recently from China’s top policymakers.

“It’s a signal that Beijing has come out to tell you that they have shifted from crackdown to support, so there is no longer much uncertainty,” said Jason Hsu, founder and CIO of Rayliant Global Advisers.

“China is now starting to enter an easing circle, which is definitely a good thing for the stock market. Stocks have fallen quite a lot before, so now they will rise again and make up for the losses.I think it is quite something to look forward to.”

China’s factory-gate inflation cooled to its slowest pace in 14 months in May due to tight COVID-19 curbs, while consumer inflation also stayed subdued.

That would allow China’s central bank to release more stimulus to prop up the economy even as monetary authorities in most other countries scramble to hose down inflation with aggressive interest rate hikes.

On Thursday, the European Central Bank said it would deliver next month its first interest rate rise since 2011, followed by a potentially larger move in September.

“Global equities came under pressure after the ECB delivered its guidance, and (ECB President Christine) Lagarde noted upside inflation risks,” said analysts at ANZ in a note on Friday.

“And with energy prices still pushing higher, it is not yet clear that inflation has peaked. Fed guidance and policy actions may have to turn more hawkish for longer. Financial markets are nervous.”

Investors expect the Federal Reserve to raise interest rates by 50 basis points next week, especially if US consumer price data on Friday confirms elevated inflation.

The consensus forecast sees a year-over-year inflation rate for May of 8.3 percent, unchanged from April.

Shares on Wall Street tumbled as the market awaited the price data. The S&P 500 and Nasdaq fell more than 2 percent in their biggest daily percentage declines since mid-May.

In currency markets, the US dollar eased 0.2 percentagainst a basket of major currencies, pulling away from its highest level in three weeks ahead of the US inflation report.

On Friday, the two-year yield, which rises with traders’ expectations of higher Fed fund rates, continued its climb to be hover around the highest level since early May. It touched 2.8352 percent compared with a US close of 2.817 percent.

The yield on benchmark 10-year Treasury notes also rose slightly to 3.0568 percent compared with its US close of 3.042 percent on Thursday.

Oil prices eased after parts of Shanghai imposed new lockdown measures. US crude dipped 0.52 percent to $120.88 a barrel. Brent crude fell 0.6 percent to $122.38 per barrel.

Gold edged down on Friday and headed for a weekly fall, as Treasury yields rose. Spot gold was traded at $1844.58 per ounce.