Asian stocks follow Wall St lower on inflation fears

Asian stock markets are lower as investors look ahead to U.S. data they worry will show inflation picking up

Japan Financial Markets (Copyright 2021 The Associated Press. All rights reserved)

Asian stock markets retreated Wednesday as investors looked ahead to U.S. data they worry will show inflation is picking up.

Shanghai Tokyo Hong Kong and Southeast Asian markets declined.

Overnight, Wall Street s benchmark S&P 500 index lost 0.9% amid concern inflation might accelerate, hampering an economic recovery and dragging on share prices.

More U.S. inflation were due out Wednesday. Investor concern is increasing following a price rise for industrial materials including copper and crude oil.

“Asian equities traded sideways following a lackluster session on Wall Street, where risk sentiment prevailed amid inflationary concerns,” Anderson Alves of ActivTrades said in a report. This week's data are "essential for investors worldwide as U.S. markets are the primary benchmark for risk assets globally.”

The Shanghai Composite Index lost 0.4% to 3,441.42 and the Nikkei 225 in Tokyo tumbled 2.5% to 27,889.82. The Hang Seng in Hong Kong opened higher but lost 0.4% by midday at 27,910.60.

The Kospi in Seoul fell 1.6% to 3,158.50 and the S&P-ASX 200 in Sydney sank 1.2% to 7,012.30.

India's Sensex opened down 0.9% at 48,722.32. New Zealand and Southeast Asian markets also declined.

On Wall Street, banks and energy companies led a broad pullback Tuesday.

The S&P 500 fell to 4,152.19. The Dow Jones Industrial Average sank 1.4% in its worst day since February. The Nasdaq composite lost 0.1% to 13,389.43.

Commodity prices have been rising, particularly for industrial metals such as copper and platinum, as well as for energy commodities like gasoline and crude oil.

Big technology companies were among the biggest decliners for a second day. Tech stocks get most of their valuation from future profits that might be less valuable if they are eroded by inflation.

Investors have worried about inflation since bond yields spiked earlier this year, though yields have mostly stabilized since then. The yield on the 10-year Treasury held edged up to 1.62% Wednesday from 1.61% on Tuesday.

The Federal Reserve has said the U.S. economy will be allowed to “run hot” to ensure a recovery is established. Despite that, investors worry rising prices might pressure central banks to pull back stimulus and raise near-zero interest rates.

In energy markets, benchmark U.S. crude gained 5 cents to $65.33 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 36 cents on Tuesday to $65.28. Brent crude, used to price international oils, added 2 cents to $68.57 per barrel in London. It rose 23 cents the previous session to $68.55.

The dollar gained to 108.85 yen from Tuesday's 108.65. The euro fell to $1.2127 from $1.2152.