Asian stocks follow Wall Street lower on inflation fears

BEIJING (AP) — Asian stock markets retreated yesterday as investors looked ahead to United States (US) 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 per cent amid concern inflation might accelerate, hampering an economic recovery and dragging on share prices.

Investor concern is increasing following a price rise for industrial materials including copper and crude oil.

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

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

A man walks in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm in Tokyo. PHOTO: AP

India’s Sensex opened down 0.9 per cent at 48,722.32. New Zealand and Southeast Asian markets also declined.

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

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

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 stabilised since then.

The yield on the 10-year Treasury held edged up to 1.62 per cent yesterday from 1.61 per cent on Tuesday.