Asian Shares Retreat On Inflation Concerns

Asian stocks fell broadly on Friday amid concerns the Federal Reserve might hurry to taper its stimulus to reign in the pace of inflation.

Sentiment was also dented by concerns around energy price increases impacting production in China and fears that disruptions to global supply chains will continue into next year.

Chinese and Hong Kong markets were closed for holidays. Japanese shares hit one-month low, with news of various supply constraints worldwide and worries that the U.S. infrastructure bill may not pass the Congress weighing on investor mood.

The Nikkei average fell as much as 681.59 points, or 2.31 percent, to settle at 28,771.07 while the broader Topix index closed 2.16 percent lower at 1,986.31. Both marked their biggest drop in three months to reach their lowest levels since early September.

Nitori Holdings plunged 6 percent and Sumitomo Chemical tumbled 5.3 percent after disappointing earnings updates. Silicon wafer manufacturer Sumco lost 4.4 percent after it unveiled plans to raise 128 billion yen ($1.14 billion) from new shares to expand production.

Toshiba Corp rallied 3.1 percent after Elliott Investment Management said it has become a “significant investor” in the company.

In economic releases, business confidence among major Japanese manufacturers improved in September for a fifth straight quarter, the Bank of Japan said.

The manufacturing sector in the country expanded at a slower rate in September while the unemployment rate remained flat at 2.8 percent in August, separate reports showed.

Australian markets fell sharply, with banks and miners leading losses after Wall Street posted its worst monthly retreat in September since the start of the pandemic.

The benchmark S&P/ASX 200 fell 146.70 points, or 2.0 percent, to 7,185.50 while the broader All Ordinaries index ended down 143.10 points, or 1.88 percent, at 7,486.60.

Commonwealth Bank of Australia shares slumped 4.1 percent while the other three big banks fell over 2 percent each. Miners BHP, Fortescue Metals Group and Rio Tinto lost 2-3 percent. Virgin Money UK plummeted 7.4 percent after its digital strategy update.

Whitehaven Coal led the gainers to end up more than 4 percent. Gold miners posted broad-based gains after gold prices rallied to a one-week high above the key $1,750 level in the previous session.

Seoul stocks tumbled on concerns about power shortages in China and the extended virus curbs at home. Amid fears of a slowing economic recovery, investors ignored positive manufacturing and trade balance data.

The Kospi average dropped 49.64 points, or 1.62 percent, to 3,019.18. Samsung Electronics, Naver, SK Hynix and Hyundai Motor declined 1-3 percent.

New Zealand shares reversed initial losses to end on a flat note as the new financial quarter kicked off. A2 Milk shares climbed 2.6 percent while Mainfreight dropped 1 percent.

U.S. stocks fell sharply overnight as concerns about the timing and pace of the Fed’s monetary easing plan overshadowed news that the Senate and the House both passed a stopgap spending bill.

While a government shutdown was avoided, the U.S. still faces a potential default amid an impasse over raising the debt ceiling.

The Dow slumped 1.6 percent to reach a three-month closing low, while the S&P 500 shed 1.2 percent and the tech-heavy Nasdaq Composite eased 0.4 percent to end at their lowest closing levels in over two months.

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