Asian stocks posted their biggest weekly fall in three months, led by financial companies after crude oil rose to a record, raising concern that faster inflation and higher interest rates will slow economic growth.
“Rising inflation is a clear and present danger,” said Paul Joseph Garcia, chief investment officer at the Manila unit of ING Investment Management Ltd, which oversees US$565 billion in global assets. “Inflation will compress margins of companies and slow consumer demand. We could see another wave of earnings downgrades if oil prices stay elevated.”
The MSCI Asia-Pacific Index lost 6.5 percent to 140.67 this week, in its sharpest decline since August last year. A measure of bank stocks on the regional benchmark led declines among the 10 industry groups, shedding 7.65 percent this week in its biggest drop since the five days ended March 7.
Taiwanese share prices closed up 0.54 percent on Friday after a positive Wall Street performance overnight, but gains were capped amid inflation concerns, dealers said.
The weighted index closed up 43.28 points at 8,105.59, off a low of 8,042.89 and off a high off 8,161.64, on turnover of NT$101.34 billion (US$3.32 billion).
The financial sector was up 1.7 percent and electronics up 0.27 percent.
Transport was down 2.85 percent and tourism 0.1 percent lower.
“Today’s gains were just a technical rebound. Inflation concerns on high crude international prices remained,” President Securities Co (統一證券) analyst Johnny Lee said.
“I expect the index to trend downward next week to test 8,000 points or even 7,900 points,” Lee said.
For the week to Friday, the TAIEX closed down 639.76 points or 7.32 percent at 8,105.59 after climbing 1.47 percent a week earlier.
Japanese share prices gained 0.61 percent as the market welcomed a rise in the dollar, dealers said.
The Nikkei-225 index gained 85.13 points to close at 13,973.73. The broader TOPIX index of all first-section shares rose 8.43 points or 0.62 percent to finish at 1,371.57.
Hong Kong share prices closed down 1.87 percent, dealers said.
The Hang Seng Index dropped 431.56 points to 22,592.30, off a low of 22,592.30 and a high of 22,984.09.
Australian shares closed 0.9 percent higher, dealers said.
The benchmark SP/ASX200 closed up 48.9 points at 5,378.1, while the broader All Ordinaries gained 46.4 points to 5,479.6.
Chinese share prices closed 3 percent lower amid weak sentiment as investors’ hopes that the government would bolster the market through new regulations faded, dealers said.
The Shanghai Composite Index, which covers A and B shares, closed down 88.73 points at 2,868.8.
South Korean shares closed only slightly higher, analysts said.
The KOSPI finished up 7.99 points, or 0.5 percent, at 1,747.35.
Share prices ended 1.34 percent lower, closing below 3,000 points for the first time since March.
The blue-chip Straits Times Index finished 40.59 points lower at 2,979.56.
Malaysian share prices closed 0.3 percent up, dealers said.
The Kuala Lumpur Composite Index rose 3.81 points to 1229.35.
Indian shares closed 0.4 percent lower, dealers said.
The benchmark Mumbai 30-share SENSEX index fell 60.58 points to 15,189.62.
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