After sharp declines in the US on Thursday, the FTSE 100 posted a new record closing high yesterday. It is likely that it will now drop back below 8,000.

The majority of Asian stock markets declined on Friday and were on track to post weekly losses as worries that interest rates would continue to rise were stoked by hotter-than-expected U.S. inflation statistics and more hawkish signals from the Federal Reserve.

Technology-focused equities saw some of the worst performances of the day, with the Hang Seng index in Hong Kong, the KOSPI in South Korea, and the Taiwan Weighted index all falling between 0.4% and 0.8%.

Yet, recent economic data from China indicated that some areas of the nation were still battling to recover from the pandemic's effects. To encourage growth, the government has implemented a variety of stimulus measures.

Broader Asian markets also declined after January's U.S. producer price index data came in higher than anticipated, mirroring the month's scorching consumer price index reading. The findings increased worries that the Fed will stick to its hawkish remarks and raise interest rates.

In separate talks, Fed members Loretta Mester and James Bullard elaborated on this idea while also expressing concern that, should inflation stay high, the central bank may decide to hike interest rates more quickly in the near future.

Since they reduce the amount of foreign capital entering the area, rising interest rates are bad news for Asian equities. Together with the Fed, regional central banks are likely to raise interest rates as well, which will tighten local liquidity circumstances.

Moreover, as a result of solid U.S. economic statistics and hawkish remarks from Federal Reserve policymakers, the U.S. dollar soared to a six-week high in early European trade on Friday.

The number of people applying for unemployment benefits surprisingly decreased last week, according to data released on Thursday.

Over in the UK, after sharp declines in the US on Thursday, the FTSE 100 posted a new record closing high yesterday. It is anticipated that it will now drop back below 8,000.

After the release of UK retail sales that rose 0.5% in January, the economic calendar is pretty quiet for the day.

(Investing.com, Reuters.com)