Asian Shares Retreat On Rate Worries

Asian stocks tumbled on Wednesday as strong U.S. data dented rate cut hopes and oil extended gains amid rising tension in the Middle East, clouding the inflation outlook.

Investors also awaited Fed Chair Jerome Powell’s speech later in thee day and the release of Friday’s U.S. non-farm payroll data for additional clarity on the timing and pace of Federal Reserve easing.

Gold ticked lower after mixed comments from a pair of Federal Reserve officials. Crude prices extended gains amid concerns around crude and fuel supplies.

China’s Shanghai Composite index slipped 0.18 percent to 3,069.30 even as a private survey showed service sector activity in the country grew as expected in March.

Hong Kong’s Hang Seng index dipped 1.22 percent to 16,725.10, falling from a near three-week high in the aftermath of a powerful earthquake in Taiwan that damaged dozens of buildings and prompted tsunami warnings that extended to Japan and the Philippines before being lifted.

Japanese markets closed sharply lower amid worries that sticky inflation and a resilient U.S. economy may prompt the Fed to delay rate cuts for longer.

The Nikkei average fell 0.97 percent to 39,451.85 while the broader Topix index settled 0.29 percent lower at 2,706.51. Among the prominent decliners, Nippon Steel, Advantest, Fast Retailing and Nintendo lost 2-4 percent.

Earlier today, the Japan Meteorological Agency issued a tsunami warning for Japan’s southern islands, but this was lifted later.

On the data front, a survey showed Japan’s service sector activity expanded at its quickest pace in seven months in March.

Seoul stocks slumped to snap a three-day winning streak, with tech, battery and auto stocks leading losses. The Kospi average plunged 1.68 percent to 2,706.97.

Australian markets fell, dragged down by financials, healthcare and real estate stocks.

The benchmark S&P ASX 200 dropped 1.34 percent to 7,782.50 while the broader All Ordinaries index ended down 1.38 percent at 8,033.60.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 index fell 0.46 percent to 12,040.49.

U.S. stocks ended lower overnight as the yield on the benchmark ten-year note reached a four-month high on comments from Fed officials signalling higher interest rates for longer.

Encouraging readings on job openings and factory orders also added to scepticism about the pace of Fed easing.

The Dow gave up 1 percent and the S&P 500 dipped 0.7 percent to extend Monday’s losses while the tech-heavy Nasdaq Composite declined 1 percent.