ASIA STOCKS STUMBLE AS FEARS OVER INFLATION SADDLE MARKETS

Asian stocks extended a selloff Thursday after a US inflation reading saw the S&P 500 drop the most since February and bond yields jump on concern that price pressures could stifle the economic recovery, Andreea Papuc and Emily Barrett reported for Bloomberg News.

While declines in Japan, Australia and South Korea didn’t match the magnitude of the pullback in US gauges, MSCI Inc.’s regional benchmark erased this year’s gain. US futures fluctuated after the technology sector paced a 2.6% decline in the Nasdaq 100. The S&P 500 dropped more than 2% in a third-straight day of declines, though the energy sector climbed as commodity prices continued to rally.

“The concern is that the markets have lost a little bit of confidence that the Fed has control of inflation; I don’t think it’s necessarily the level, I think it’s the concern over ‘is the Fed going to wait too long to address the inflation question,”’ Victoria Fernandez, Crossmark Global Investments chief market strategist, said on Bloomberg TV.

“I am not sure the market is extremely comfortable with that at this point.” Federal Reserve Vice Chairman Richard Clarida says the rise in inflation is largely due to transitory factors.

S&P 500 futures rose 0.3% as of 9:22 a.m. in Tokyo. The S&P 500 fell 2.1%. Nasdaq 100 contracts added 0.3%.

The Nasdaq 100 slid 2.6%. Japan’s Topix index fell 0.7%. Australia’s S&P/ASX 200 Index lost 0.3%. South Korea’s Kospi index declined 0.7%. The yen traded at 109.76 per dollar after slipping 1%.

The offshore yuan was at 6.4566 per dollar. The Bloomberg Dollar Spot Index was steady after rising 0.7%. The euro was at $1.2074. The yield on 10-year Treasuries held at 1.69% after jumping seven basis points. Australia’s 10-year bond yield rose four basis points to 1.81%. West Texas Intermediate crude fell 0.6% to $65.68 a barrel. Gold was at $1,814.50 an ounce.

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