Asia shares wallow near one-month lows on inflation anxiety

Asia shares wallow near one-month lows on inflation anxiety
Business

U.S. stocks fell on Tuesday as speculation that rising inflation pressure could prompt interest rate hikes sooner rather than later dragged on shares and hobbled the dollar, which struggled at a 2-1/2-month low.




FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York City, U.S., May 4, 2021. REUTERS/Brendan McDermid

12 May 2021 08:50AM




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SYDNEY: Asian shares languished near one-month lows on Wednesday as investors speculated surging commodity prices and growing inflationary pressure in the United States could lead to earlier rate hikes and higher bond yields globally.


MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1per cent, after tumbling 1.6per cent on Tuesday for its biggest daily percentage drop since March 24.


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"There isn't a clear catalyst behind this purge," said Marios Hadjikyriacos, investment analyst for XM.


"It seems to be a combination of inflation fears making a comeback and some market participants moving higher along the value spectrum, cutting their exposure to anything with a stretched valuation."


At 683.8 points, the regional index is not too far from a record high of 745.89 touched in February and is still up 3per cent this year so far, on top of a 19per cent jump in 2020 and a near 16per cent rise in 2019.


Japan's Nikkei rose 0.6per cent.


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Australia shares skidded 0.4per cent while South Korea's KOSPI index slipped 0.1per cent.


Some analysts said the fact the sell-off was largely contained to technology shares suggested that investors were merely moving away from more speculative plays, rather than entirely losing faith in the economic outlook.


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