In This Article:
(Updates throughout, adds fresh quotes in paragraphs 3-6)
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Asia follows U.S., European stocks lower
* Hong Kong down 3.7%, 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 bolstered expectations for more aggressive rate hikes, and as Chinese equity markets slumped over regulatory concerns of U.S.-listed mainland firms.
Sentiment also suffered on worries over Russia's war against Ukraine, after talks between their foreign ministers on Thursday brought little respite in the conflict between the two countries.
"We've got a terrible macro backdrop (with) a serious inflation problem implying that we're going to see much, much tighter monetary policy," said Rob Carnell, chief economist at ING in Singapore.
Russia's war against Ukraine was likely to make everything from energy and metals to agricultural goods a lot more expensive, Carnell added.
"Everybody's incomes are going to get eroded. Global growth is going to get battered. What more do you need?
"At some stage you probably will pull back much more sharply, but at the moment there's still a bit of denial going on in markets."
The United States, together with the Group of Seven nations and the European Union, will move on Friday to revoke Russia's "most favored nation" status over its invasion of Ukraine, multiple people familiar with the situation told Reuters.
Stripping Russia of its favored nation status paves the way for the United States and its allies to impose tariffs on a wide range of Russian goods, which would further ratchet up pressure on an economy that is already heading into a "deep recession."
By mid-afternoon, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 2.0%, after a retreat on Wall Street spilled over on many of the region's country benchmarks, which turned deeply red.
Sellers swarmed Hong Kong's equity market after U.S.-listed Chinese stocks tumbled following the naming of the first Chinese firms to be potentially de-listed in the United States.
The Hang Seng index slumped 3.7%, 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.