Concerns over hawkish signals from a Federal Reserve meeting this week outweigh evidence that economies might be improving.

Overnight Tuesday trading saw a decline in most Asian stock markets as concerns over hawkish signals from a Federal Reserve meeting this week outweighed evidence that Chinese economic activity had recovered in January.

Shanghai Shenzhen CSI 300 and Shanghai Composite indices in China decreased by 1% and 0.5%, respectively, despite official statistics showing a robust comeback in manufacturing and services activity in China in January.

According to the reading, the country's anti-COVID regulations have a favourable impact on the economy and are anticipated to trigger a bigger rebound later this year. Chinese stock exchanges were also expected to rise for a third straight month, though marginally.

Asia's technology-heavy indexes underperformed for the day as an overnight sell-off in U.S. heavyweights spread.

The Fed is expected to raise rates by 25 basis points on Wednesday, which sent tech stocks reeling ahead of the meeting.

However, given that recent indications of the U.S. economy's resiliency provide the central bank greater leeway to keep raising interest rates, investors remain wary of any hawkish signals from the Fed.

Early Tuesday also saw a decline in oil prices as the possibility of future interest rate rises and large supplies of Russian crude outweighed expectations for a revival in demand in China.

Despite China's reopening, the picture for demand is still unknown because Russia's shipments appear to be unaffected by the sanctions.

Investors anticipate that the U.S. Federal Reserve will hike interest rates by 25 basis points on Wednesday, followed the next day by increases of 50 basis points by the Bank of England and the European Central Bank. Higher rates may reduce oil consumption and slow down the world economy.

Key Developments Tuesday:

• German Unemployment Change (Jan) at 08:55 GMT.
• Eurozone preliminary GDP for QoQ and YoY at 10:00 GMT.
• German preliminary CPI YoY (Jan) at 13:00 GMT.
• US Consumer Confidence (Jan) at 15:00 GMT.

(Investing.com, Reuters.com)