Asian markets follow Wall Street lower

Asian markets fell Thursday, tracking losses on Wall Street fuelled by growing inflation concerns and talk that central banks will have to tighten their monetary policies quicker than anticipated.

While recent data and healthy corporate earnings indicate that consumers continue to spend, traders are increasingly fearful that more than a year of massive financial support -- coupled with rocketing demand and supply chain snarls -- could send prices out of control.

Figures Wednesday showed inflation in the United Kingdom at a decade high and an 18-year peak in Canada -- a week after US figures came in at levels not seen since 1990.

The data -- which mirror big gains in other countries -- have ramped up pressure on policymakers to act soon, with some commentators warning of a possible recession if they did not.

And eyes are focused on the Federal Reserve -- the central bank of the world’s top economy -- whose massive bond-buying programme has been a key pillar of support to the global recovery and rally in stock markets.

Officials have said they will begin winding back the so-called quantitative easing measures gradually from this month and not be in any rush to hike interest rates, saying the inflation surge is only temporary.

But an extended period of reports of soaring prices could force them to re-evaluate their plans.

“With these most recent inflation readings, there is some concern that the Fed will reduce the amount of purchases -- accelerate that tapering,” Michael Arone of State Street Global Advisors told Bloomberg Television.

“That would be a surprise to markets and could induce some volatility.”

All three main indexes on Wall Street ended in the red, and Asia followed suit.

Hong Kong, which fell Wednesday after six straight days of gains, extended losses with tech firms among the biggest losers, while Tokyo, Shanghai, Seoul, Wellington, Manila and Jakarta also saw sizeable selling. Still, Sydney and Singapore edged up.

Mumbai also fell, with Indian mobile payments giant Paytm losing a quarter of its value on its debut, after raising $2.5 billion in the country’s biggest ever IPO, as traders questioned whether the loss-making firm would ever turn a profit.