Hong Kong stocks drop 2%, South Korea CPI rises

SINGAPORE — Asia-Pacific stocks fell on Tuesday as South Korea’s inflation rose and investors look ahead to the Reserve Bank of Australia’s interest rate decision.

Hong Kong’s Hang Seng index fell 2.13% in early trade, and the Hang Seng Tech index slipped 3.1%.

The city’s gross domestic product shrank by 1.4% in the second quarter of 2022, according to advance estimates released by the government on Monday. GDP decreased by 3.9% in the first quarter of the year.

Mainland China stocks also dropped. The Shanghai Composite lost 1.49% and the Shenzhen Component shed around 2%.

The Nikkei 225 in Japan slipped 1.35%, and the Topix index lost 1.72%.

Australia and South Korea saw more moderate losses.

In South Korea, the Kospi shed 0.45% and the Kosdaq declined 0.38%.

Consumer prices in South Korea rose 6.3% in July compared with the same period in 2021, official data showed on Tuesday. That’s in line with expectations and the fastest acceleration in prices since November 1998, Reuters reported.

The Bank of Korea raised rates by 50 basis points in July.

Australia’s S&P/ASX 200 was 0.34% lower.

The Reserve Bank of Australia is expected to hike by 50 basis points after official data showed prices in Australia rose 6.1% in the second quarter compared with a year ago.

MSCI’s broadest index of Asia-Pacific shares outside of Japan declined 1.33%.

Overnight in the U.S., the Dow Jones Industrial Average lost 46.73 points, or 0.14%, to 32,798.40.

The S&P 500 shed 0.28% to 4,118.63 and the Nasdaq Composite lost 0.18% and closed at 12,368.98.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.224.

The Japanese yen traded at 130.63 per dollar, continuing its strengthening trend. The Australian dollar was at $0.7014, after breaking above $0.7.

“The AUD is higher as the USD drifted lower overnight amid more weak U.S. data,” ANZ Research said in a Tuesday note.

Oil futures slipped on Tuesday. U.S. crude shed 0.6% to $93.33 per barrel after settling 4.8% lower in the previous session, and Brent crude lost 0.75% to $99.28 per barrel. The international benchmark settled 3.79% lower.