BANGKOK – Asian shares slipped Friday after a retreat on Wall Street that left the Nasdaq composite down 2.5%.
Tokyo fell nearly 2% but recovered some ground later in the session. Hong Kong, Shanghai and Seoul also were lower.
China reported its global trade surplus surged nearly 30% in 2021 to $676.4 billion. The trade surplus in December swelled 20.8% over a year earlier to a monthly record of $94.4 billion, customs data showed Friday.
Exports rose to $3.3 trillion in 2021 despite shortages of processor chips for smartphones and other products as global demand rebounded from the pandemic. Manufacturers also were hampered by power rationing imposed in some areas.
South Korea’s central bank raised its key interest rate to 1.25% from 1%, acting to counter inflation. But while it is dialing back monetary stimulus, having raised the benchmark rate twice so far, the government announced 14 trillion won ($11 billion) in extra spending Friday, mainly to help small businesses recovering from the impact of waves of coronavirus outbreaks.
Inflation surged to 3.7% in December, and the latest rate hike “gives a strong signal that the Bank is prioritizing clamping down on inflation and financial imbalances," Alex Holmes of Capital Economics said in a report. “It’s pretty clear that more hikes are imminent," he said.
South Korea’s Kospi declined 1.4% to 2,920.75.
The Shanghai Composite index lost 0.6% to 3,534.17 and the Hang Seng in Hong Kong lost 1% to 24,179.16. Tokyo's Nikkei 225 lost 1.5% to 28,078.98.
In Sydney, the S&P/ASX 200 shed 0.9% to 7,405.70.
India's Sensex was 0.4% lower.
Technology companies led a sell-off on Wall Street Thursday that pulled the major indexes into the red for the week.
The S&P 500 fell 1.4% to 4,659.03. The tech-heavy Nasdaq slumped 2.5% to 14,806.81. The Dow Jones Industrial Average fell 0.5% to 36,113.62.
Smaller company stocks also fell. The Russell 2000 slid 16.62 points, or 0.8%, to 2,159.44.
The selling came as investors gauged company earnings reports and new data pointing to rising prices at the wholesale level. Inflation has been a key focus for investors as they try to gauge how rising prices will impact businesses, consumers and the Federal Reserve's policy on interest rates in 2022.
“Investors are continuing to be concerned that the worst is yet to be seen in terms of inflation,” said Sam Stovall, chief investment strategist at CFRA.
The yield on the 10-year Treasury slipped to 1.72% from 1.73% from late Wednesday.
The Labor Department on Thursday reported that its producer price index, which measures prices at the wholesale level, surged by a record 9.7% for all of 2021. The increase set an annual record and provides further evidence that inflation is still present at all levels of the U.S. economy. The report follows Wednesday's release of consumer price data for December, which showed that inflation jumped at its fastest pace in nearly 40 years last month.
Many of the big tech companies with solid revenue and profits, such as Apple and Microsoft, will suffer less than their counterparts that have little revenue, but rosy projections, he said.
Even so, those big tech names also lost ground Thursday. Apple fell 1.9% and Microsoft fell 4.2%.
Health care stocks, communication services firms and a mix of companies that rely on direct consumer spending were among the decliners. Pfizer fell 2%, Facebook parent Meta Platforms dropped 2% and Amazon slid 2.4%.
Industrial companies were among the few gainers. Delta Air Lines rose 2.1% after reporting surprisingly good fourth-quarter financial results. Other airlines also got a boost. American Airlines rose 4.5% and United Airlines rose 3.5%.
U.S. benchmark crude oil shed 33 cents to $81.79 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the basis for pricing international oil, lost 15 cents to $84.32 per barrel.
The dollar weakened to 113.66 Japanese yen from 114.18 yen. The euro rose to $1.1476 from $1.1457.