By Ambar Warrick
Investing.com-- Asian markets slipped on Wednesday after weak inflation readings from China raised concerns over sluggish demand in the region’s largest export destination, with focus now turning to key U.S. inflation data later in the day.
China’s blue-chip Shanghai Shenzhen CSI 300 index fell 1.2% by 0145 ET (0545 GMT), while the Shanghai Composite index lost 0.6%.
Industrial stocks were among the worst performers in the country after data showed producer price inflation sank to a 17-month low in July, reflecting subdued activity in the wake of several COVID-19 lockdowns.
The reading also points to sluggish demand for commodity exports to China, which are a major economic driver for several Asian countries.
In Asia, technology stocks bore heavy losses, tracking a weak overnight lead-in from Wall Street. The NASDAQ Composite index shed 1.2% on a negative forecast from chipmaker Micron Technology Inc (NASDAQ:MU).
Hong Kong’s tech-heavy Hang Seng index fell the most among its Asian peers, losing 2.2%. Asian tech heavyweights Tencent Holdings Ltd (HK:0700), Alibaba Group Holding Ltd (HK:9988) and Baidu Inc (HK:9888) lost between 1% and 3.3%.
The negative lead-in offset strong results from Chinese computer maker Lenovo Group (HK:0992), which logged a higher-than-expected quarterly profit. Hong Kong-listed shares of the firm fell 0.6%.
Japan’s Nikkei 225 index shed 0.7%, while Australian stocks lost 0.5%. The tech-heavy Taiwan Weighted index also lost 0.7%.
Focus now turns towards upcoming U.S. inflation data, due at 0830 ET on Wednesday. While the reading is expected to have eased slightly in June from the prior month, it is likely to stay pinned at 40-year highs.
This is expected to spur interest rate hikes by the Federal Reserve, which will further reduce liquidity and weigh on stock markets in the coming months.