Asian shares reach low grounds on inflation-driven selloff
Asian share markets recorded two consecutive sessions of losses to reach one-month lows on Wednesday. The drop came after an increase in commodity prices and growing inflationary pressure fueled the prospect of rate hikes and surging bond yields.
MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 0.5%. The index dropped lower after a 1.6% decline on Tuesday. China’s blue-chip index shed 0.2% as Australian shares slipped 0.6%. South Korea’s KOSPI tallied a 0.7% loss, while Japan’s Nikkei erased early gains to perform 0.4% lower.
Analysts viewed that accommodative policies and fiscal largesse would ease the downswing. Investors’ focus was now on the U.S. consumer price index as this would confirm inflation expectations. More so, the U.S. Federal Reserve forecasts higher inflation, but officials emphasized fleeting factors responsible for the temporary increase.