In Europe data released Wednesday revealed that inflation remained a problem, particularly in the UK, implying that more interest rate rises are on way.

Many Asian stock markets fell on Thursday, following Wall Street's mediocre lead, as concerns about increasing interest rates and sluggish economic growth made traders fearful of risky assets.

China's CSI 300 and Shanghai Composite were among the day's worst performers, down 0.6% and 0.7%, respectively.

The People's Bank of China holding its benchmark lending rates at historic lows provided little help to Chinese markets, despite the fact that the decision indicates additional liquidity support for local equities.

Though data released earlier this week revealed that China's economy grew faster than predicted in the first quarter of 2023, the increase was mostly driven by a rebound in spending. The country's industrial sector, seen as an economic barometer, failed to recover from a COVID-induced slump.

Fears of increasing global interest rates impeded sentiment towards regional stocks after high inflation figures from the UK and eurozone solidified predictions of further rate rises by the Bank of England and European Central Bank.

Hawkish remarks from Fed officials also prompted markets to reconsider bets that the central bank will end its rate rise cycle as soon as June, resulting in a dismal overnight finish on Wall Street.

President of the Federal Reserve Bank of New York, John Williams, stated on Wednesday that inflation remains concerning and that the US central bank will take action to reduce it.

This comes as Morgan Stanley reported solid first-quarter results, joining a number of its rivals in exceeding Wall Street estimates and assuaging recent concerns about the health of the United States banking sector.

The Fed is largely expected to give a last 25-basis-point rate rise in May, after which the argument will shift to whether the Fed will maintain rates stable for the rest of the year or begin delivering cuts towards the end of 2023 as the world's largest economy begins to weaken.

In Europe, however, statistics released Wednesday revealed that inflation remained a problem, particularly in the United Kingdom, implying that more interest rate rises are on the way.

Markets will also be watching for the publication of the minutes from the ECB's most recent meeting, which is expected later in the afternoon, for indications about policymakers' views on the magnitude of future rises.

(investing.com, reuters.com)