Asian Shares Slide On Stagflation Fears

Asian stocks fell broadly on Tuesday amid worries about inflation and a mounting risk of a global economic slowdown – often called stagflation.

There was no major progress in the peace talks between Ukraine and Russia and oil prices rose about 2 percent in Asian trading, weighing on sentiment.

Chinese stocks tumbled amid concerns over inflation, risks from the Russia-Ukraine war and rising Covid-19 cases in mainland China and Hong Kong.

The benchmark Shanghai Composite Index plunged 79.33 points, or 2.4 percent, to 3,293.53, while Hong Kong’s Hang Seng Index slumped 291.76 points, or 1.4 percent, to 20,765.87.

Japanese shares hit a 16-month low amid worries that higher input costs may weigh on profit margins in the near term. The Nikkei 225 Index fell 430.46 points, or 1.7 percent, to 24,790.95, its lowest close since November 6, 2020. The broader Topix ended 1.9 percent lower at 1,759.86.

Hino Motors led the losses to end down more than 12 percent, while heavyweight SoftBank Group plunged 5 percent and Uniqlo operator Fast Retailing declined 2.7 percent. Banks Sumitomo Mitsui Financial, Mitsubishi UFJ Financial and Mizuho Financial gave up 3-5 percent.

Australian markets ended notably lower despite upbeat business sentiment numbers from National Australia Bank. Mining and energy stocks fell on profit taking as surging commodity prices fanned fears of runaway inflation, slowing economic growth and pressure on corporate earnings.

The benchmark S&P/ASX 200 Index shed 58.30 points, or 0.8 percent, to close at 6,980.30, while the broader All Ordinaries Index closed 0.9 percent lower at 7,252.90.

Mining heavyweights BHP and Rio Tinto ended down 3.7 percent and 4.3 percent, respectively. In the energy sector, Woodside Petroleum, Santos and Beach Energy all fell around 4 percent.

Seoul stocks ended lower for a third straight session on concerns that Russia’s invasion of Ukraine may hamper the post-pandemic economic recovery. The Kospi slid 28.91 points, or 1.1 percent, to close at 2,622.40. Samsung Electronics, SK Hynix, LG Chem and POSCO gave up 1-3 percent.

New Zealand shares tumbled in the face of bigger worries about inflation, as short-dated government bond yields hit new highs and ANZ Bank forecast hikes of 50 basis points at both the April and May policy meetings.

The benchmark S&P/NZX 50 Index dropped 168.32 points, or 1.4 percent, to 11,744.95. Heartland Group Holdings, Air New Zealand and Skellerup Holdings lost 5-7 percent.

U.S. stocks fell for a third straight session overnight amid heightening economic risks from the Ukraine crisis.

The Dow dropped 2.4 percent and the S&P 500 shed 3 percent to eleven and eight-month closing lows, respectively, while the tech-heavy Nasdaq Composite tumbled 3.6 percent to end at its lowest level in a year.