In This Article:
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Asia follows U.S., European stocks lower
* Hong Kong down 3.5%, Nikkei off 2.4%
* South Korean, Australian benchmark stock indexes also down
By Daniel Leussink
TOKYO, March 11 (Reuters) - Asian shares extended a global slump on Friday after the fastest U.S. inflation in four decades and a hawkish European Central Bank (ECB) bolstered expectations for more aggressive rate hikes, hammering sentiment already stung by the Ukraine war.
Sellers swarmed Chinese equity markets after U.S.-listed Chinese stocks tumbled following the naming of the first Chinese firms to be potentially de-listed in the United States.
Risk appetite suffered more broadly as investors braced for faster tightening of monetary conditions after data on Thursday showed a 7.9% annualised jump in U.S. consumer inflation in February, the largest increase in 40 years.
In morning trade in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.7%, as a retreat on Wall Street spilled over on many of the region's country benchmarks, which turned deeply red.
Hong Kong's Hang Seng index slumped 3.5%, with the shares of Yum China and four other firms taking a beating after the companies were embroiled in an auditing dispute between Beijing and Washington.
The sell-off in Chinese shares came even as the country's securities regulator said on Friday it was confident it will reach an agreement with U.S. counterparts on securities supervision.
Outside Hong Kong, the losses in Chinese shares were smaller, with the country's blue-chip index down 1.3%.
Elsewhere, Japan's Nikkei lost 2.4%, while South Korean shares shed 1.0% and Australian shares dropped 0.9%.
Sentiment was also not helped after talks between Ukraine and Russia's foreign ministers on Thursday brought little respite in the conflict between the two countries.
"Disappointingly, although widely expected, Russia-Ukraine talks failed to yield a positive outcome," said Rodrigo Catril, a senior foreign exchange strategist at NAB in Sydney.
Analysts believe Russia's war against Ukraine will push up inflation around the world further as it drives up prices of oil and other commodities.
Goldman Sachs downgraded its U.S. real gross domestic product growth forecast for 2022 to +1.75% from +2.0% previously to reflect higher oil prices and other drags on growth related to the war in Ukraine.
While markets widely expect the U.S. Federal Reserve to raise the Fed funds target rate by 25 basis points at the conclusion of next week's monetary policy meeting, the CPI data suggested the FOMC could move "more aggressively" to curb inflation, as promised by Fed Chair Jerome Powell last week.