Asian stocks followed losses in their US peers as growing concern about inflation led to a selloff in Treasuries, and as worsening sentiment toward China sapped sentiment.
MSCI’s gauge of regional equities headed for its biggest one-day drop in more than two weeks, more than erasing Tuesday’s rally.
China’s benchmark stock index slid to the lowest since September with investors fearful of an anticipated hike in US tariffs.
The S&P 500 fell more than 1% Tuesday as a report on US service providers showed inflation hitting the highest since early 2023.
“We must ask whether there is reason to buy risk today,” said Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. “I’d argue that there isn’t.”
Economic uncertainties are damping investor optimism across Asia, with Chinese markets indicating growing alarm over a deflationary spiral.
That comes as yield premiums in credit are near their lowest since the global financial crisis, testing investor appetite for a spate of deals that are flooding global debt markets.
