Asian stocks slide ahead of US inflation update

BEIJING (AP) — Asian stocks sank Monday ahead of a U.S. inflation update traders worry might lead to more interest rate hikes.

Tokyo, Hong Kong and Seoul declined. Shanghai advanced. Oil prices declined.

Traders hope Tuesday's inflation data will show upward pressure on U.S. prices is easing, which might encourage the Federal Reserve to ease off efforts to cool business activity and hiring. They worry a strong reading after estimates of 2022 inflation were revised up last week would reinforce plans to keep rates high and possibly increase them.

A strong inflation figure “can move through risk assets like a wrecking ball,” said Stephen Innes of SPI Asset Management in a report.

The Nikkei 225 in Tokyo sank 1% to 27,392.23 while the Shanghai Composite Index advanced 0.5% to 3,278.07. The Hang Seng in Hong Kong lost 0.5% to 21,090.70.

The Kospi in Seoul declined 0.9% to 2,448.15 and Sydney's S&P-ASX 200 shed 0.3% to 7,408.50.

India's Sensex opened down 0.6% at 60,334.54. New Zealand and Singapore retreated while Jakarta and Bangkok gained.

On Friday, Wall Street's benchmark S&P 500 index rose 0.2% to 4,090.46. The index ended the week with a loss of 1.1%, its biggest weekly decline since December.

The Dow Jones Industrial Average gained 0.5% to 33,869.27. The Nasdaq fell less than 0.1% to 11,718.12.

Stocks have been rallying since last month on hopes the Fed might start cutting rates as early as late this year. That is despite warnings by Chair Jerome Powell that rates will stay elevated for an extended period until inflation pressures are extinguished.

Other central banks in Europe and Asia also have raised rates to cool inflation.

Wall Street raised its forecast of how high the Fed might raise rates after Powell said last week there is a “significant road...