May 11, 2022

Asia-Pacific markets set to dip after data shows U.S. inflation near 40-year highs in April

SINGAPORE — Shares in Asia-Pacific were lower on Thursday as tech stocks sold off following overnight losses on Wall Street — after data showed the consumer price index stateside in April remaining near the highest level in more than 40 years.

In Hong Kong, the Hang Seng Tech index declined 3.84% to 3,864.95. Shares of Alibaba dropped 6.6% while Meituan shed 2.73%. also saw its Hong Kong-listed stock plunge 7.78%.

Technology stocks in Taiwan also saw losses, with Taiwan Semiconductor Manufacturing Company shares sliding 3.07% while Pegatron fell 1.17%.

Shares of Japanese conglomerate SoftBank Group plummeted 8.03%. Over in South Korea, Kakao shares slipped 5.5% while Krafton shed 1.95%.

In the broader markets, Hong Kong’s Hang Seng index fell 2.24% to close at 19,380.34 while the Taiex in Taiwan declined 2.43% on the day to 15,616.68.

Mainland Chinese stocks shed earlier gains, with the Shanghai Composite closing 0.12% lower at 3,054.99 and the Shenzhen Component falling 0.132% to 11,094.87.

“We’re not very … pessimistic on China equities at this point,” Selina Sia, head of greater China equity research at Credit Suisse Wealth Management, told CNBC’s “Street Signs Asia” on Thursday.

“We have seen that cases in Shanghai have already peaked, and hopefully omicron can come under control sooner rather than later, but we are seeing positive signs there,” said Sia. “Besides, policymakers have made statements after the Politburo meeting at the end of April in order to support infrastructure investment, platform economies and also the property market.”

The Nikkei 225 in Japan fell 1.77%, closing at 25,748.72, while the Topix index shed 1.19% to 1,829.18.

In South Korea, the Kospi closed 1.63% lower at 2,550.08. Australian stocks also declined as the S&P/ASX 200 dipped 1.75% to end its trading day at 6,941.

MSCI’s broadest index of Asia-Pacific shares outside Japan declined 2.48%.

“We think in the equity space, Europe and U.S. face bigger tightening central bank and growth headwinds than arguably Japan and Asia,” said Gareth Nicholson, chief investment officer for international wealth management at Nomura. “Asia has China supporting them, Japan has a very dovish central bank.”

“Also, with the valuation perspective, we think there’s more upside this part of the world in equity than the other side,” Nicholson told CNBC’s “Squawk Box Asia” on Thursday.

The U.S. consumer price index surged 8.3% in April as compared with a year ago — near the highest level in more than 40 years, official data showed Wednesday, . The April reading, which represented a slight ease from March’s peak, was also above the Dow Jones estimate for a 8.1% gain.

Shares on Wall Street dropped following the release of the U.S. consumer inflation data. The tech-heavy Nasdaq Composite lagged as it fell 3.18% to 11,364.24 while the broader S&P 500 shed 1.65% to 3,935.18. The Dow Jones Industrial Average declined 326.63 points, or 1.02%, to 31,834.11.

Bitcoin falls below $28,000

The price of bitcoin briefly fell below $27,000 for the first time since December 2020, continuing a recent sell-off in the cryptocurrency space against a backdrop of broader risk-off sentiment among investors. It later recovered from some of those losses and was trading at $27,851.44 as of 4:15 a.m. ET Thursday, according Coin Metrics data.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.313 as it continues to hold above the 103.8 level that it fell below at certain points earlier this week.

The Japanese yen traded at 128.59 per dollar, stronger as compared with levels above 130.5 seen against the greenback earlier this week. The Australian dollar was at $0.6881 after a recent decline from levels above $0.70.

Oil prices were lower during the afternoon of Asia trading hours, with international benchmark Brent crude futures down 1.74% to $105.64 per barrel. U.S. crude futures shed 2.02% to $103.57 per barrel.

— CNBC’s Jeff Cox contributed to this report.

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