Asia report: Region tumbles after inflation-fuelled Wall Street plunge
Asian stocks were a sea of red at the end of Wednesday, after a major sell-off on Wall Street overnight following hotter-than-expected inflation data stateside on Tuesday.
In Japan, the Nikkei 225 fell 2.78% to 27,818.62, as the yen strengthened 1% on the dollar to last trade at JPY 143.1.
Automation specialist Fanuc was down 4.38%, fashion firm Fast Retailing lost 3.82%, and technology conglomerate SoftBank Group was off 4.4%.
The broader Topix index was 1.97% lower by the end of trading in Tokyo, settling at 1,947.46.
Fresh data out of Japan showed core machinery orders surging 5.3% month-on-month in July, more-than-beating the 0.8% contraction economists had pencilled in according to Reuters polling.
It was also well ahead of the 0.9% rise booked in June.
Core orders were more than 12% higher on the year, well ahead of the 6.6% improvement anticipated.
On the mainland, the Shanghai Composite lost 0.8% to 3,237.54, and the technology-heavy Shenzhen Component was 1.25% weaker at 11,774.78.
South Korea’s Kospi was down 1.56% at 2,411.42, while the Hang Seng Index in Hong Kong slid 2.48% to 18,847.10.
Chinese technology plays were among the leading losers in the special administrative region, with Alibaba Group down 4.5%, Baidu falling 5.66%, and JD.com 4.2% weaker.
The blue-chip tech stocks were on the back foot in Seoul as well, with Samsung Electronics down 2.24% and SK Hynix 1.9% lower.
Wednesday’s moves in Asia came on the back of a dire session on Wall Street overnight, where the Dow lost almost 1,300 points after inflation data came in higher than expected.
US consumer price inflation did slow in August, but was still above expectations according to the Labor Department, fuelling expectations of another big rate hike from the Federal Reserve.
Inflation eased to 8.3% on the year, from 8.5% in July, but came in above expectations of 8.1%.
On a monthly basis, consumer price inflation rose 0.1%, compared to a flat reading in July.
Core inflation, meanwhile, which strips out food and energy, increased to 6.3% in August from 5.9% a month earlier.
“Asian markets were unsurprisingly weaker for the most part as the trading baton was handed over,” said Interactive Investor head of markets Richard Hunter.
“As investors sought refuge in the US Dollar as a haven investment, pushing the price to new recent highs, there was further pressure on local currencies.
“With the potential to knock on to the fact that many of the countries in the region are reliant on exports, the moves further heightened tensions on whether any economic recovery is possible in the shorter term.”
Oil prices were higher at the end of the Asian day, with Brent crude futures last up 0.5% on ICE at $93.64 per barrel, and West Texas Intermediate advancing 0.46% to $87.71 on NYMEX.
In Australia, the S&P/ASX 200 tumbled 2.58% to 6,828.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 skidded 0.89% to 11,658.04.
The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.05% at AUD 1.4852, and the Kiwi advancing 0.11% to NZD 1.6657.
Reporting by Josh White at Sharecast.com.