Asian stocks slump, tracking US losses after inflation report

Asian markets dropped on Wednesday, tracking losses in the United States and Europe as traders responded negatively to higher-than-expected US inflation data that raised fears of a prolonged period of interest rate hikes, the AFP reported.
Tokyo, Hong Kong, Shanghai, Seoul, Taipei and Sydney were all lower, reversing gains made in recent days due to positive market expectations from the US labour department’s consumer price index (CPI) report.
On Tuesday, US government data showed the annual increase in CPI had slowed slightly in August to 8.3 percent, but that prices continued to rise month-on-month, increasing by 0.1 percent.
The news shook equity markets, where there had been widespread expectations of US year-on-year inflation being around eight percent, with a decrease in prices compared with July.
Tokyo led the day’s losses in Asia, with the Nikkei 225 plunging 2.8 percent.
In Hong Kong, stocks lost more than two percent, with major Chinese conglomerate Fosun seeing billions wiped off its value as jittery investors reacted to media reports that the group was under regulator scrutiny.
Major European bourses followed the trend, with London, Frankfurt and Paris opening lower.