Stocks retreat in Asia as China inflation pushes higher

Asian shares fell Wednesday, tracking Wall Street’s retreat, with Chinese benchmarks leading the decline after the government reported a surge in inflation in October.

China's consumer price index, a main measure of inflation, rose 1.5% in October, up from 0.7% the month before, the National Bureau of Statistics reported. The surge to a 13-month high was driven mainly by a jump in prices for food and fuel, it said.

Producer prices, or wholesale prices, climbed 13.5%, adding to worries that price pressures might limit the central bank's ability to adjust its policies to bolster growth. Hong Kong's Hang Seng dropped 1% to 24,575.71, while the Shanghai Composite index lost 0.8% to 3,479.31.

But the latest numbers were exaggerated by low comparative data from last year and underlying price pressures remain low, Julian Evans-Pritchard of Capital Economics said in a report.

“We continue to think that consumer price inflation will remain below 2% in the coming quarters and that inflation is unlikely to be a major constraint on the PBOC’s ability to loosen monetary policy," he said.

Elsewhere in Asia, Tokyo's Nikkei 225 lost 0.6% to 29,106.78 and the Kospi in South Korea declined 1.1% to 2,929.81. Australia's S&P/ASX 200 edged 0.1% lower, to 7,423.90.

On Tuesday on Wall Street, stocks ended moderately lower, breaking an eight-day winning streak that had been fueled by strong company earnings and economic data.

The S&P 500 index lost 0.4% to 4,685.25. The last time the S&P 500 had eight straight days of gains was April 2019. The Dow Jones Industrial Average fell 0.3%, ending at 36,319.98 and the Nasdaq lost 0.6%, to 15,886.54.

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