Asian Shares Retreat As Recession Worries Mount

Asian stocks fell broadly on Tuesday as an energy crisis loomed over the European economy and a fresh COVID-19 outbreak in China added to worries about a global economic slowdown.

Investors also braced for a big week of data and earnings for directional cues. U.S. consumer price index data for June is due on Wednesday and June retail sales data is scheduled for Friday.

Chinese shares fell sharply as rising case counts in several regions fueled talks of another round of painful lockdowns, especially in Shanghai or Beijing.

The benchmark Shanghai Composite Index dropped 1 percent to 3,281.47, while Hong Kong’s Hang Seng Index dove 1.3 percent to 20,844.74.

In economic news, new bank lending in China rose more than expected in June as the central bank stepped up efforts to boost growth, data showed.

Japanese stocks tumbled as rising domestic cases of COVID-19 reflected the arrival of a new wave of infections. The Nikkei 225 Index slumped 1.8 percent to 26,336.66, while the broader Topix closed 1.6 percent lower at 1,883.30.

Tech and manufacturing companies paced the declines, with Yaskawa Electric, TDK and Fanuc losing 4-5 percent.

Data showed earlier in the day that the producer price index in Japan hit a record high for the third straight month in June.

Seoul stocks extended losses for a second straight session as new coronavirus cases in the country surged to a two-month high. The Kospi gave up 1 percent to settle at 2,317.76 ahead of the Bank of Korea’s interest rate decision on Wednesday.

Heavyweight Samsung Electronics dropped 1.2 percent, chemical giant LG Chem shed 1.5 percent and internet portal operator Naver fell 2.9 percent.

Australian markets ended on a flat note as banks gained ground, offsetting losses in the mining sector. Healthcare stocks rose, with CSL rising 1.6 percent as the dollar hit a two-decade peak.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 Index finished marginally lower at 11,103.39 ahead of the RBNZ rate decision.

U.S. stocks fell overnight as investors awaited cues from earnings, a slew of economic data and key inflation figures due this week.

The tech-heavy Nasdaq Composite fell 2.3 percent to snap a five-day winning streak as Tesla CEO Elon Musk sought to terminate his Twitter deal. The S&P 500 lost 1.2 percent and the Dow shed half a percent.

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