Asia-Pacific Shares Fall on US Inflation Spike; Japan’s Nikkei Average Hits Four-Month Low

The major Asia-Pacific stock indexes tumbled on Thursday as Wall Street shares fell sharply with inflation data stoking fears of a rate hike by the Federal Reserve.

In Japan, the Nikkei slumped to a 4-month low as an inflation scare hit expensive shares. South Korean shares also fell for a third straight day on U.S. inflation fears. Stocks in China and Hong Kong fell on soft bank lending, Sino-U.S. tensions. In Australia, shares closed lower for a third session as miners, tech stocks took a dive.

Cash Market Performance

Japan’s Nikkei 225 Index settled at 27448.01, down 699.50 or -2.49%. Hong Kong’s Hang Seng Index finished at 27825.78, down 405.26 or -1.44% and South Korea’s KOSPI Index closed at 3122.11, down 39.55 or 1.25%.

In China, the benchmark Shanghai Index settled at 3429.54, down 33.22 or -0.96% and Australia’s S&P/ASX 200 Index finished at 6982.70, down 62.20 or -0.88%.

US Stocks Fall Sharply

U.S. stocks slumped on Wednesday as key inflation data showed higher-than-expected price pressures.

The U.S. Labor Department reported that the prices American consumers pay for goods and services accelerated at their fastest pace since 2008 last month with the Consumer Price Index (CPI) spiking 4.2% from a year ago. The Dow fell 1.99%. The S&P 500 Index lost 2.1% and the NASDAQ Composite slid 2.6%.

Nikkei Slumps to 4-Month Low as Inflation Scare Hits Expensive Shares

Japanese shares sank on Thursday, with the Nikkei average hitting a four-month low, as SoftBank Group and expensive stocks were pummeled by a U.S. inflation scare. Over the past three sessions, the index has lost 7.01%, its biggest three-day fall since the market turmoil in March 2020.

SoftBank Group dropped 7.8% as concern over its frothy portfolio valuations eclipsed the fact that it has announced a record profit for a Japanese firm. Other richly valued shares, mainly from the tech and healthcare sectors, fell sharply.

South Korea Stocks Fall for Third Straight Day on U.S. Inflation Fears

South Korean shares closed lower for a third straight session on Thursday, as a shocking rise in U.S. inflation and concerns that the Federal Reserve’s tightening may come earlier than expected dented sentiment.

Technology giant Samsung Electronics slid 1.88% even after the company said it would invest 171 trillion won ($151.10 billion) in non-memory chips through 2030, raising its previous investment target of 133 trillion won announced in 2019.

China, Hong Kong Stocks Fall on Soft Bank Lending, Sino-US Tensions

China and Hong Kong stocks fell on Thursday, after the former’s latest bank lending data missed forecasts, and as Sino-U.S. tensions weighed.

Chinese banks extended 1.47 trillion Yuan ($227.74 billion) in new Yuan loans in April, down from March and missing analysts’ expectations. Analysts polled by Reuters had predicted new Yuan loans would drop to 1.6 trillion yuan in April, down from 2.73 trillion Yuan in the previous month and 1.7 trillion Yuan a year earlier.

Australia Shares Close Lower for Third Session as Miners, Tech Stocks Dive

Australian shares fell for a third session on Thursday, with miners and tech stocks leading losses, as accelerating inflation in the United States stoked concerns over sooner-than-expected rate hikes.

Sentiment was further soured after China missed forecasts for quarterly gross domestic (GDP) and March industrial output, worrying investors in Australia about its top trade partner’s economic recovery.

Tech stocks were the biggest percentage losers on the benchmark, ending 4.7% lower, tracking a tech sell-off in U.S. peers.

Local miners also dragged the index, ending nearly 1.9% lower as iron ore prices fell more than 7% after a five-session rally.