Asian Shares Fall On Inflation, Growth Concerns

Asian stocks fell sharply on Monday, as battle loomed in Ukraine’s east and the Shanghai coronavirus outbreak worsened.

With Chinese inflation figures painting a mixed picture of the economy, investors looked ahead to the ECB policy meeting and the release of U.S. inflation data this week for additional clues about the interest rate outlook.

China’s Shanghai Composite Index slumped 2.6 percent to close at 3,167.13, as Covid curbs in the country threatened to exacerbate supply-chain snarls. Hong Kong’s Hang Seng Index plunged 3 percent to 21,208.30 on worries about inflation risks and tightening financial conditions.

Official data showed that China’s consumer price inflation accelerated to 1.5 percent in March from 0.9 percent in February – coming in above economists’ forecast of 1.2 percent. However, producer price inflation eased to 8.3 percent in March from 8.8 percent in the previous month.

Japanese stocks fell notably, with the Nikkei 225 Index ending 0.6 percent lower at 26,821.52, dragged down by big technology stocks. Robotics company Yaskawa Electric lost 3.1 percent despite flagging a record annual operating profit.

Tokyo Electric Power Company Holdings and Chubu Electric Power climbed 16.2 percent and 7.4 percent, respectively after Prime Minister Fumio Kishida announced a ban on Russia coal, a move that could accelerate the transition to renewable energy and the restarting of nuclear plants.

Australian markets gave up early gains to end on a flat note as banks gained ground on hopes for improving margins, offsetting declines in the mining sector. Gold miners also surged to hit a one-week high.

Nickel miner Western Areas jumped 5.5 percent after IGO raised its offer for the company. Shares of IGO advanced 2.3 percent.

Seoul stocks ended slightly lower amid selling by foreign investors. The benchmark Kospi slipped 0.3 percent to settle at 2,693.10 on fears of slowing global growth.

Tech, battery and bio shares led losses, with Sansung Biologics, Celltrion, Samsung SDI and LG Energy Solution declining 1-3 percent.

Financials and insurers outperformed on expectations that they will benefit from higher interest rates. KB Financial Group gained 2.4 percent and Samsung Life added 1.9 percent. LG Electronics rallied 2.5 percent on an upbeat first-quarter earnings forecast.

New Zealand shares fell sharply on concerns over high inflation and rising interest rates. The benchmark NZX-50 Index ended 1.1 percent lower at 11,932.03, dragged down by consumer and tech stocks.

The Reserve Bank on New Zealand reviews its monetary policy on Wednesday, with economists remaining divided over whether it will hike by 25 or 50 basis points.

U.S. stocks ended mixed on Friday as investors dumped growth and technology shares in anticipation of higher interest rates.

The Dow rose 0.4 percent, while the S&P 500 shed 0.3 percent and the tech-heavy Nasdaq Composite gave up 1.3 percent.

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