Lower As Stagflation Fears Weigh

Major Asia-Pac equity indices are 0.8% to 1.4% weaker at typing, following a negative lead from Wall St. High-beta equities across the region experienced another day of selloffs amidst lingering stagflation fears arising from elevated commodity prices, while energy and utility stocks pared Monday’s gains as the major crude benchmarks WTI and Brent backed away from 14-year highs (although both remain above $120/bbl at writing).

• The CSI300 sits 0.8% softer at typing, hitting fresh 20-month lows, led by weakness in richly valued healthcare and consumer discretionary stocks. It wasn’t all bad news in the space. Large-cap liquor stocks such as Luzhou Laojiao & Kweichow Moutai caught a bid on the back of a strong earnings report from the latter, leading the consumer staples sub-index higher after 4 straight sessions of losses.
• The Hang Seng deals 0.1% lower, reversing earlier gains to trade just above 5-year lows made on Monday. High-beta tech again led the sell-off, with the Hang Seng Tech 1.0% worse off at typing. Stocks listed on the Hang Seng now trade at a 14% discount to their book value according to BBG data, the widest such margin in at least a decade.
• U.S. e-mini equity index futures sit 0.1% to 0.2% lower at typing.