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Asian Shares Plunge After Wall Street Sell-off


Asian stocks closed sharply lower on Friday on renewed worries about rising inflation and higher interest rates after the yield on the 10-year U.S. Treasury note neared its highest levels in four years and the Bank of England hinted at somewhat earlier and deeper-than-expected rate hikes.

The downturn in oil market and concerns about high valuations also spooked investors. The declines in Asia mirrored the overnight sell-off on Wall Street, where the Dow Jones Industrial Average plunged 4.2 percent to enter correction territory amid rising government debt yields on worries that the Federal Reserve may fight inflation by aggressively raising interest rates.

Chinese shares led regional losses as liquidity conditions tightened before the Chinese New Year break starting next week. China's central bank today said it has released temporary liquidity of almost 2 trillion yuan ($316.11 billion) to meet cash demand before the long Lunar New Year holidays.

The benchmark Shanghai Composite index plummeted 131.12 points or 4.02 percent to finish at 3,130.93, while Hong Kong's Hang Seng index plunged 943.85 points or 3.10 percent to 29,507.42.

On the data front, China's consumer and producer price inflation slowed in January, data from the National Bureau of Statistics showed.

Consumer prices climbed 1.5 percent year-on-year in January, the weakest in four months, after rising 1.8 percent in December. Producer prices grew 4.3 percent year-on- year, weaker than December's 4.9 percent increase but exceeding expectations for 4.2 percent growth.

Japanese shares tumbled as crude prices slumped and the dollar neared a four-month low versus the yen. The Nikkei average fell 508.24 points or 2.32 percent to 21,382.62, taking its weekly loss to 8 percent. The broader Topix index closed 1.91 percent lower at 1,731.97, down about 7 percent for the week.

Nissan Motor plummeted 3.1 percent after the automaker slashed its full-year operating profit forecasts. On the flip side, Nikon rallied 3 percent on reporting a significant rise in earnings for the first nine months of the fiscal.

Australian shares lost ground following weak cues from Wall Street and other regional markets. The benchmark S&P/ASX 200 dropped 52.70 points or 0.89 percent to 5,838 amid across the board selling.

The broader All Ordinaries index fell 57.70 points or 0.96 percent to 5,937.50 as oil and metal prices slid to their lowest in several weeks.

Santos, Origin Energy and Beach Energy lost 2-5 percent as oil prices extended losses for the sixth straight session.

Mining heavyweights BHP Billiton and Rio Tinto declined around 1 percent while banks ended with modest losses. Department store chair Myer Holdings plummeted 9.3 percent after warning of more writedowns.

On the positive side, Gold miner Evolution Mining jumped 4.5 percent, while Northern Star and Regis Resources rose about 2 percent as the precious metal traded firm on safe-haven buying.

Australian's jobless rate is forecast to fall to 5.25 percent for the year ending June 2018, instead of 5.5 percent estimated three months ago, the Reserve Bank of Australia said in its Statement on Monetary Policy today.

At the same time, estimates for economic growth and inflation were broadly unchanged from the November statement.

South Korea's Kospi average fell 43.85 points or 1.82 percent to 2,363.77, its weakest level in nearly five months on worries about inflation and the possibility that the Federal Reserve will raise interest rates faster than expected.

Market heavyweight Samsung Electronics tumbled 2.8 percent after Yonhap News Agency said that prosecutors had conducted a search on the company's offices as part of their probe into a former president, Lee Myung-bak.

New Zealand shares followed Wall Street lower as bond yields surged and SkyCity Entertainment Group unveiled its first-half earnings results. The benchmark S&P/NZX 50 index dropped 84.77 points or 1.04 percent to 8,092.37, taking its weekly decline to 3.7 percent.

Malaysia's KLSE Composite index was losing more than 1 percent. Malaysia's unemployment rate held steady at 3.3 percent in December, figures from the Department of Statistics showed, while industrial production growth eased at a faster-than-expected pace in the month.

Benchmark indexes in India, Indonesia, Singapore and Taiwan were down between 1.2 percent and 1.5 percent.

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