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Asian stock markets tumble due to high inflation

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Relevance up to 13:00 2022-01-22 UTC+00

Asian stock market indexes went down during today’s session. The Shanghai Composite lost 0.84%, the Shenzhen Composite declined by 1.19%, and the Hang Seng Index decreased by 0.64%. South Korea’s KOSPI and Japan’s Nikkei 225 fell by 1.38%.

The sell-off was triggered by Japan’s inflation data, which was released on Friday. Consumer prices in Japan increased by 0.8% in December 2021 compared to November’s increase of 0.6%, reaching a 2-year high. Month-over-month, the inflation rate remains at 0.1%.

On the Nikkei 225, the stocks with the biggest losses were Tokyo Electron, Ltd. (-6.6%), Advantest Corp. (-4.4%), Mitsubishi Motors Corp. (-5%), and Mazda Motor Corp. (-4.7%). Shares of Toyota Motor Corp. lost 2.8% due to supply issues. The company was forced to halt production at 11 factories due to a parts crunch, cutting its output by 9 million vehicles.

Investors are also concerned by a record high increase in COVID-19 cases. The total daily number of infections has reached 3.7 million. A continuously high spread of the coronavirus would force governments to enact new quarantine measures, putting pressure on economic growth.

On the Hang Seng Index, Alibaba Group Holding, Ltd. and Netease Inc. were the worst performing stocks, losing 5.3% and 4.2% respectively. Shares of PetroChina Co., Ltd. lost 3% on falling crude oil prices.

The government of South Korea is planning to spend an additional $12 billion this year to support small and medium-sized businesses battered by the pandemic.

On the KOSPI, the stocks with the biggest losses were Kia Corp (-1.7%), Hyundai Motor Co. (-1.2%), Samsung Electronics Co. (-1.8%), and LG Corp. (-0.8%).

In Australia, shares of BHP Group, Ltd. and Rio Tinto, Ltd. fell by 4.8% and 4.1% respectively.

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