Red Day As Stagflation Worries Weigh

Major Asia-Pac equity indices sit 1.0% to 2.9% weaker, building on a negative lead from Wall St. Worry from heightened tension surrounding the Russia-Ukraine conflict continues to mix with stagflation fear surrounding elevated commodity prices, seeing high-beta equities from various sectors again come under pressure, while broadly lending a bid to commodity-related stocks. Note that news that Russia is set to open humanitarian corridors in Ukraine has just crossed, resulting in some light risk-positive price action.

• The ASX200 finished 1.0% lower, weakening to a lesser extent than major regional peers. The ASX200’s energy and materials sub-indices again outperformed (+5.3% and +1.0% respectively), while the richly valued healthcare sub-index led losses.
• The Hang Seng Index brings up the rear amongst regional equity indices, trading 2.9% weaker at levels not witnessed since Jul ’16. Financials struggled, with steep losses seen in index heavyweights HSBC and Standard Chartered. China-based tech underperformed as well, with the Hang Seng Tech sitting 3.5% lower at typing, hitting fresh all-time lows (since inception in Jul ’20).
• Elsewhere in the region, the CSI300 prints 2.4% lower to trade at levels last seen in Jul ‘20, on track for a fourth straight day of losses. Sharp declines were again seen in high-valuation consumer staples equities (particularly amongst Chinese liquor stocks), with only marginal gains observed in the index’s energy and utilities sub-indices.
• U.S. e-mini equity futures are 0.9% to 1.6% worse off at typing, trading a touch above worst levels heading into European hours.