Asian Shares Plunge On Inflation, COVID Worries

(RTTNews) - Asian stocks nosedived on Monday as hotter-than-expected U.S. inflation data coupled with news that China's capital Beijing is facing an "explosive" COVID-19 outbreak connected to a bar stoked concerns about global growth.

China's Shanghai Composite index dropped 0.9 percent to 3,255.55 as Beijing and Shanghai resumed mass testing for COVID-19 and a planned reopening of schools in the capital was delayed, raising concerns of more crippling lockdowns.

Hong Kong's Hang Seng Index tumbled 3.4 percent to close at 21,067.58, dragged down by tech giants such as Tencent and Alibaba.

Japanese shares fell the most in more than four months after U.S. stocks posted their biggest weekly drop since January on Friday.

The Nikkei 225 Index closed 3 percent lower at 26,987.44 in its biggest fall since January 27 and hitting its lowest level since May 27. The broader Topix fell 2.2 percent to 1,901.06. Fanuc, Daikin Industries, Tokyo Electron and SoftBank Group lost 4-7 percent.

Kansai Electric added 2.6 percent after the nuclear power plant operator said it would restart a reactor in August, two months ahead of its previous plan.

Japanese large manufacturers' confidence weakened further in the second quarter, business outlook survey results from the Ministry of Finance showed earlier today. The business survey index for big manufacturers dropped to -9.9 in the June quarter from -7.6 in the first quarter.

The yen briefly fell to ¥135 against the U.S. dollar for the first time since February 2002 and the 10-year bond yield pushed to a six-year high ahead of the interest rate decision by the Bank of Japan due on Friday.

Australian markets were closed for a holiday. New Zealand's NZX-50 Index ended 1.9 percent lower at 10,924.74 - marking its worst single session in nearly four months and closing at its lowest level in two years.

Seoul stocks plunged to a 19-month low on rate hike fears. The Kospi ended 3.5 percent lower at 2,504.51, extending losses for the fifth straight session.

U.S. stocks closed out their worst week since January with a third straight losing session Friday, as an unexpected jump in inflation added to concerns about faster policy tightening and an impending recession.

Data showed the annual rate of consumer price growth accelerated to 8.6 percent in May from 8.3 percent in April, showing the biggest surge since December 1981.

A measure of U.S. consumer sentiment plunged in early June to the lowest on record, adding to the downbeat sentiment.

The Dow lost 2.7 percent, the tech-heavy Nasdaq Composite plunged 3.5 percent and the S&P 500 tumbled 2.9 percent.