Asian Shares Broadly Lower On Inflation Concerns

Asian stocks fell broadly on Wednesday, as investors digested mixed Chinese inflation data and looked ahead to the release of U.S. inflation data that could influence how soon the Federal Reserve pares its stimulus program.

Chinese shares closed higher after the release of inflation data. The benchmark Shanghai Composite index edged up 11.29 points, or 0.32 percent, to 3,591.40 while Hong Kong’s Hang Seng index ended down 38.75 points, or 0.13 percent, at 28,742.63.

Consumer prices in China were up 1.3 percent year-on-year in May, the National Bureau of Statistics said. That fell short of expectations for an increase of 1.6 percent and was up from 0.9 percent in April.

On a monthly basis, inflation eased 0.2 percent versus expectations for a decline of 0.1 percent.

The bureau also said that producer prices jumped an annual 9.0 percent, exceeding expectations for an increase of 8.5 percent and up from 6.8 percent a month earlier. That was the fastest pace of increase in over 12 years.

Japanese shares ended lower as investors waited for U.S. inflation data for further clues regarding monetary policy. The Nikkei average fell 102.76 points, or 0.35 percent, to 28,860.80, while the broader Topix index closed 0.28 percent lower at 1,957.14.

A retreat in long-term U.S. Treasury yields weighed on banks, with Sumitomo Mitsui Financial and Mitsubishi UFJ Financial losing 1.1 percent and 1.6 percent,
respectively. Eisai surged 16.3 percent to extend gains from the previous session after its Alzheimer’s drug received a nod from U.S. regulators.

Australian markets gave up early gains to end slightly lower for the day after data showed consumer confidence slipped for a second straight month in June due to concerns around the two-week lockdown in Melbourne.

The benchmark S&P/ASX 200 hit a record high in intra-day trading before ending the session down 22.40 points, or 0.31 percent, at 7,270.20. The broader All Ordinaries index slipped 20.30 points, or 0.27 percent, to 7,522.

Miners BHP, Fortescue Metals Group and Rio Tinto rose between half a percent and 1 percent. Mining services provider Perenti Global lost 2.2 percent after it won a US$496m contract from Sandfire Resources.

Oil stocks Woodside Petroleum, Santos and Beach Energy fell between half a percent and 1 percent. Banks also ended broadly lower, with NAB and Westpac pacing the declines.

Brickworks soared 11.3 percent after the building materials firm said it expects record-high earnings from its property assets.

Seoul stocks extended losses from the previous session as central bank data showed the country’s economy grew 1.7 percent in the first quarter from three months earlier, 0.1 percentage point higher than earlier expected.

The benchmark Kospi dropped 31.65 points, or 0.97 percent, to 3,216.18. S K Hynix tumbled 3.9 percent while Samsung Electronics and Naver fell around 1 percent.

New Zealand shares eked out modest gains, with the benchmark NZX-50 index rising 48.85 points, or 0.39 percent, to 12,566.50. Software maker Vista Group paced the gainers to climb as much as 5.9 percent.

U.S. stocks ended a lackluster session on a flat note overnight as investors weighed worries over inflation and supply chain troubles against signs of a pandemic recovery.

The U.S. trade deficit narrowed in April and job openings soared to a new record high in the month, reinforcing investor optimism around the economic recovery.