(Bloomberg) – Asian stocks fell, led by Japan and Korea, as surging commodity prices fueled concerns about global inflation.
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The MSCI Asia-Pacific Index fell as much as 1.7% on Tuesday in its third day of decline, with technology being the worst performing sector. Japan’s Nikkei 225, South Korea’s Kospi and Taiwan’s Taiex all extended losses from their recent highs to 10%, putting them on track for technical corrections.
Inflation concerns intensified the rout in Asian stocks, as the regional benchmark has already fallen nearly 3% this month. It plunged 5.2% in the three months ended in September, ending a five-quarter winning streak. A commodity gauge has hit a record high as a resurgence in demand for commodities collides with supply constraints.
“The point is, there are a lot of uncertainties about the strength of the economic rebound, inflationary pressures, geopolitics, climate change, etc.” wrote Olivier d’Assier, APAC Applied Research Manager at Qontigo GmbH, in an e-mail.
The global equities gauge fell more than 5% from the all-time high in early September, as Treasury yields rose ahead of an imminent cut in Federal Reserve stimulus. Concerns over a crackdown on Chinese companies and a slowing economy also plagued sentiment.
“The economy has not returned to normal and still faces restrictions related to the pandemic in several places, but the markets behaved as if things were back to normal,” d’Assier wrote. “This correction is just an adjustment to reality.”
SECTORS TO MONITOR
Covid vaccine and treatment makers, including SK Bioscience, followed their global peers down for a second day after Merck & Co. said its experimental Covid-19 pill halved the risk of hospitalization and death
Benchmark that tracks Chinese tech giants including Tencent collapses, on course for new record as global tech sell-off triggered by rising US Treasury yields adds to concerns regarding Beijing’s regulatory crackdown
Oil producers and refiners, including Japan’s IPEX, advanced as crude prices continued to climb, thanks to OPEC + acceptance to maintain gradual increases in production
THE MARKETS AT A GLANCE
MSCI Asia-Pacific index down 1.1%
Japan’s Topix index down 1.8%; Nikkei 225 down 2.8%
Hong Kong’s Hang Seng index up 0.1%; Hang Seng China Enterprises down 0.2%
Taiwan’s Taiex index down 0.3%
South Korea’s Kospi Index Down 2%; Kospi 200 down 1.9%
Australian S & P / ASX 200 down 0.8%; New Zealand’s S & P / NZX 50 down 1.3%
Singapore’s Straits Times index down 0.9%; The Malaysian KLCI has changed little; Philippine Stock Exchange Index down 0.4%; Jakarta Composite up 0.2%; Vietnam’s NV index up 0.6%
Fast Retailing fell 6.4%, the highest since March 19, after reporting that Japan’s Uniqlo comparable store sales for September fell 19% year-on-year.
Chinasoft International fell 10%, the highest since Aug. 17, after the software company agreed to sell up to 162 million new shares at HK $ 12.26 each in placement.
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