BEIJING — Asian stock markets retreated Wednesday as investors looked ahead to U.S. data they worry will show inflation is picking up.
Shanghai, Tokyo and Southeast Asian markets declined. Hong Kong advanced. Taiwan’s tech heavy index sank more than 8% before rebounding, but still reflected deep losses.
Overnight, Wall Street’s benchmark S&P 500 index lost 0.9% amid concern inflation might accelerate, hampering an economic recovery and dragging on share prices.
More U.S. inflation were due out Wednesday. Investor concern is increasing following a price rise for industrial materials including copper and crude oil.
“Asian equities traded sideways following a lackluster session on Wall Street, where risk sentiment prevailed amid inflationary concerns,” Anderson Alves of ActivTrades said in a report. This week’s data are “essential for investors worldwide as U.S. markets are the primary benchmark for risk assets globally.”
The Shanghai Composite Index SHCOMP, -0.96% lost less than 0.1%, while the Nikkei 225 NIK, -2.49% in Tokyo fell 1.3%. The Hang Seng HSI, -1.71% in Hong Kong fell 0.2%.
The Kospi 180721, -1.25% in Seoul tumbled 1.5% and the S&P-ASX 200 XJO, -0.88% in Sydney fell1%. New Zealand and Southeast Asian markets also declined.
Taiwan’s TAIEX Y9999, -1.46% fell 4%, with shares of heavily weighted Taiwan Semiconductor Manufacturing TSM, -4.11% 2330, -2.32% dropping nearly 2%.
On Wall Street, banks and energy companies led a broad pullback Tuesday.
The S&P 500 SPX, -2.14% fell to 4,152.19. The Dow Jones Industrial Average DJIA, -1.99% sank 1.4% in its worst day since February. The Nasdaq Composite COMP, -2.67% lost 0.1% to 13,389.43.
Commodity prices have been rising, particularly for industrial metals such as copper and platinum, as well as for energy commodities like gasoline and crude oil.
Big technology companies were among the biggest decliners for a second day. Tech stocks get most of their valuation from future profits that might be less valuable if they are eroded by inflation.
Investors have worried about inflation since bond yields spiked earlier this year, though yields have mostly stabilized since then. The yield on the 10-year Treasury TMUBMUSD10Y, 1.694% held steady Tuesday at 1.61%.
The Federal Reserve has said the U.S. economy will be allowed to “run hot” to ensure a recovery is established. Despite that, investors worry rising prices might pressure central banks to pull back stimulus and raise near-zero interest rates.
In energy markets, benchmark U.S. crude CL.1, -1.86% lost 17 cents to $65.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 36 cents on Tuesday to $65.28. Brent crude BRN00, -1.76%, used to price international oils, sank 21 cents to $68.34 per barrel in London. It rose 23 cents the previous session to $68.55.
The dollar USDJPY, -0.13% gained to 108.85 yen from Tuesday’s 108.65. The euro EURUSD, 0.15% fell to $1.2126 from $1.2152.