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Asian Shares Fall On Valuation Concerns

stockmarkets jan18 24feb21 lt

Asian stocks fell on Wednesday as persistent worries over inflation and steep asset valuations offset signs that the U.S. Federal Reserve would continue its fiscal policy support.

China's Shanghai Composite Index tumbled 72.28 points, or 2 percent, to 3,564.08 as U.S. President Joe Biden showed readiness to meddle in the imprisonment of two Canadian citizens.

Hong Kong's Hang Seng Index plunged 914.40 points, or 3 percent, to 29,718.24, as the city raised the stamp duty on stock trading for the first time since 1993.

Japanese shares also fell sharply as tech stocks succumbed to selling pressure following a decline in the Nasdaq Composite index overnight.

The Nikkei 225 Index slumped 484.33 points, or 1.6 percent, to 29,671.70, falling below the psychologically important 30,000 level for the first time in seven sessions. The broader Topix closed 1.8 percent lower at 1,903.07.

Market heavyweight SoftBank Group plummeted 5.2 percent, while chip-related shares such as Tokyo Electron, Shin-Etsu Chemical and Fanuc plunged 3-5 percent.

Department store operators rose on hopes for normalization in the economy after regional governments requested emergency pandemic measures to be lifted ahead of he March 7 scheduled end. IsetanMitsukoshi Holdings, Takashimaya and J. Front Retailing all surged around 5 percent.

Australian markets retreated as commodities stabilized after their recent rally. The benchmark S&P/ASX 200 Index fell 61.40 points, or 0.9 percent, to 6,777.80, while the broader All Ordinaries Index ended down 61.40 points, or 0.86 percent, at 7,049.40.

A drop in Chinese iron ore futures pressured miners, with BHP and Rio Tinto falling around 3 percent. Gold miner Northern Star Resources lost 3.6 percent as a firmer dollar dented the precious metal's appeal.

Technology stocks followed their U.S. peers lower, with buy-now-pay-later giant Afterpay giving up 3 percent ahead of its half-year results due on Thursday.

Woolworths Group rose over 1 percent after the supermarket chain reported a 28 percent jump in its first-half profit. Fuel supplier Viva Energy soared 6 percent despite reporting a full-year loss.

Seoul stocks tumbled to hit nearly one-month lows as massive foreign sell-off raised uncertainy. The benchmark Kospi dove 75.11 points, or 2.5 percent, to 2,994.98, with tech and bio stocks pacing the decliners.

Hyundai Motor slumped 3.9 percent after saying it would replace batteries in over 25,000 Kona electric vehicles due to defects in battery cells.

Business conditions in South Korea deteriorated slightly in February, the Bank of Korea said today, with a Business Survey Index score of 82 - down from 85 in January. The outlook for the following month rose by 4 points to 85, the bank said.

New Zealand shares fell notably as the country's central bank held its official cash rate at a record low of 0.25 percent, as expected, and warned that the economic outlook ahead remains "highly uncertain." The benchmark NZX-50 Index dropped 106.42 points, or 0.9 percent, 12,282.42.

U.S. stocks pared earlier losses to end mixed overnight as investors cheered reassuring comments from Fed Chair Jerome Powell on inflation and interest rates.

Powell reiterated interest rates will remain at near-zero levels and the Fed will continue its asset purchases at the current rate until "substantial further progress" has been made toward its goals of maximum employment and price stability.

The Dow Jones Industrial Average and the S&P 500 edged up around 0.1 percent, while the tech-heavy Nasdaq Composite slipped half a percent.

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