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Asian Stocks Drop Amid Recovery Concerns

asianmarket 021219 28oct21 lt

Asian stocks retreated on Thursday amid concerns that high inflation may force global central banks to tighten monetary policy earlier than thought.

With the Bank of Japan delivering another dovish statement, investors awaited cues from the European Central Bank meeting later in the day and the pivotal U.S. Federal Reserve meeting next week.

Chinese shares ended lower after reports that the Chinese government is pushing to curb spiking coal prices. The benchmark Shanghai Composite Index tumbled 43.89 points, or 1.2 percent, to 3,518.42.

Hong Kong's Hang Seng Index ended down 73.01 points, or 0.3 percent, at 25,555.73, with financials and healthcare stocks leading losses.

Japanese shares ended sharply lower as the Bank of Japan retained its easy monetary policy settings and downwardly revised its annual growth forecast.

The Nikkei 225 Index slumped 278.15 points, or 1 percent, to 28,820.09, while the broader Topix closed 0.7 percent lower at 1,999.66.

Computer maker Fujitsu lost 8.1 percent after its outlook missed expectations. Robot maker Fanuc plunged 8.7 percent after cutting its outlook for this year.

On the positive side, Silicon wafer maker Shin-Etsu Chemical rose 2.9 percent and chip-making equipment maker Screen Holdings jumped 8.2 percent on robust earnings. Tokyo Electron added 2 percent and Advantest climbed 5 percent.

In economic news, the total value of retail sales in Japan fell 0.6 percent year-on-year in September, a government report showed. That beat forecasts for an annual decline of 2.3 percent following the 3.2 percent yearly drop in August.

Australian markets ended lower on rate hike worries after the Reserve Bank of Australia unexpectedly didn't offer to buy the April 2024 bond, sending the yield soaring above its target.

The benchmark S&P/ASX 200 index dropped 18.30 points, or 0.3 percent, to 7,430.40, while the broader All Ordinaries Index ended down 18.30 points, or 0.2 percent, at 7,739.70.

Miners extended losses from the previous session, tracking weaker iron ore prices. BHP and Rio Tinto lost 1.7 percent and 1.5 percent, respectively. Fortescue Metals Group edged up slightly after reporting record first quarter iron ore shipments.

Origin Energy, Santos and Woodside Petroleum all lost around 2 percent as oil extended overnight losses after Iran said talks with world powers to revive a 2015 nuclear deal would resume before the end of next month. Whitehaven Coal shares fell almost 5 percent.

Seoul stocks fell for the second day running on concerns around inflation and the latest regulatory developments in China. The benchmark Kospi gave up 15.94 points, or 0.5 percent, to close at 3,009.55.

Hyundai Motor and Samsung Biologics both fell over 1 percent, while LG Chem climbed 3 percent and SK Hynix surged 4.9 percent. Samsung Electronics rose 0.9 percent after reporting record sales revenue in the third quarter.

New Zealand shares ended slightly lower, with the benchmark NZX-50 Index closing down 49.27 points, or 0.4 percent, at 12,970.99. Air New Zealand fell 2.4 percent after providing an update at its annual general meeting.

U.S. stocks ended mostly lower overnight as investors digested earnings results from mega-cap tech companies and weak durable goods orders data.

The Dow gave up 0.7 percent and the S&P 500 declined half a percent, while the tech-heavy Nasdaq Composite ended nearly flat.

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