Asian Shares Retreat On Inflation Worries

stockmarkets aug16 10mar22 lt

Asian stocks succumbed to selling pressure on Friday as inflation worries mounted and Russia's invasion of its neighbor Ukraine entered the 16th day, with little signs of progress on a potential cease-fire agreement.

An MSCI Inc. gauge of the region's stocks was on track for its fourth consecutive weekly decline as the war in Ukraine showed no sign of easing.

Russia and Ukraine failed to make a breakthrough Thursday in their first top-level talks since Moscow's invasion two weeks ago.

As JPMorgan Chase & Co. joined Goldman Sachs Group Inc. in pulling back from Russia, President Vladimir Putin warned international companies halting operations in Russia that he could seize their assets.

The euro retreated from its overnight gains after the European Central Bank signaled an end to asset purchases in the third quarter in a hawkish tilt to tackle inflation.

U.S. investment bank Goldman Sachs downgraded its forecast for U.S. economic growth for this year to reflect higher oil prices and other drags on growth related to the war in Ukraine.

Gold was on course for its second weekly gain, while oil prices traded mixed in Asian trade amid confusion over whether major producers would help to plug a gap in supplies from Russia.

Chinese and Hong Kong markets led regional losses after Chinese stocks listed in the U.S. had their worst day since 2008 amid renewed regulatory concerns and expectations for steeper interest-rate hikes.

China's Shanghai Composite index fell 1.9 percent to 3,232, while Hong Kong's Hang Seng index was down as much as 3.7 percent.

China's securities regulator said today it was confident it will reach an agreement with U.S. counterparts on securities supervision.

Japan's Nikkei was down 2.4 percent as signs of rising inflation in the United States raised the potential for more-aggressive action from the Federal Reserve. The Fed is widely expected to lift interest rates by at least 25 basis points next week.

Australia's benchmark S&P/ASX 200 was down over 1 percent, New Zealand's NZX-50 index fell about 1 percent and South Korea's Kospi average was down 1.1 percent.

U.S. stocks ended lower overnight after U.S. inflation came in at a four-decade high, cementing expectations for an interest rate hike by the Federal Reserve at the conclusion of next week's meeting.

The Dow lost over 460 points at its worst levels of the day before recouping losses to end 0.3 percent lower. The tech-heavy Nasdaq Composite tumbled 1 percent and the S&P 500 eased 0.4 percent.

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