Asian stocks tracked sharp sell-offs on Wall Street on Thursday as investors worried about rising global inflation, zero-fight policies against COVID-19 and the war in Ukraine, while the dollar-hold held most of its strong growth overnight.

MSCI’s largest stock index in the Asia-Pacific region outside of Japan fell 2% in the first hours of Asian trading, making it the first daily decline of the week.

Japan’s Nikkei fell 2.4%.

Its decline led to a loss of 1.5% for Australia’s resource index, a drop in Hong Kong shares of 2.6% and a retreat of 1% for blue chips in China.

Overnight on Wall Street reports of revenue from retail giants worsened sentiment, and Target Corp warned of higher margins due to rising fuel and freight costs as it reported its quarterly earnings halved.

The day before, Walmart Inc warned of a similar reduction in margins.

Shares of Target fell 24.88%, the biggest drop in a day since the stock market crashed on Black Monday, October 19, 1987.

On Wednesday, the Nasdaq fell nearly 5% and the S&P 500 lost 4%.

“Tuesday’s rebound was ‘too optimistic’, so self-doubt caused by misconceptions is forcing traders to push the sell button even harder,” said Heb Chen, an IG market analyst.

“I must say that concerns about inflation have never disappeared since we entered 2022, however, until things get to the point of no return, they seem to be moving in the direction of‘ out of control ’. This is probably the most disturbing thing for the market.

The US dollar, which strengthened due to falling risk appetite, stopped rising on Thursday, while the dollar fell 0.05% to a basket of major currencies.

The Japanese yen, by contrast, fell 0.2% against the dollar.

British inflation has reached its highest annual level since 1982, when energy bills rose, while in Canada inflation rose to 6.8% last month, largely due to rising food and housing prices.

Bilal Hafiz, CEO of London-based research firm Macro Hive, said there is now a strong bias towards stocked assets, especially cash.

“Short-term stock jumps may occur, as in the last few days, but the overall picture is that the era of low profitability is over and we are moving to higher rates,” Hafiz told Reuters Global Markets.

“It will put pressure on all markets that have benefited from low returns, especially stocks.”

U.S. Treasury bonds rose overnight and were stable in Asia, bringing yields on benchmark 10-year Treasury bonds to 2.8931%.

The two-year return, which is growing due to traders’ expectations for higher rates on Fed funds, reached 2.6715% compared to the US close of 2.667%.

On Thursday morning, oil futures were mixed.

US oil fell 0.2% to $ 109.38 a barrel.

Brent crude rose 0.26% to $ 109.4 a barrel.

Gold was slightly lower and the spot price was $ 1,814.8899 an ounce.

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