Stocks in China and Hong Kong fell Wednesday as China's consumer prices slipped into negative territory in July, for the first time in 28 months.
The CSI300, which tracks stocks of the largest listed companies in Shanghai and Shenzhen, fell 0.31%.
Mainland Chinese markets were lower, with the Shanghai Composite closing 0.49% down at 3,244.49 and extending its losing streak to three days.
China's July CPI declined by 0.3% year-on-year, smaller than the 0.4% expected by economists polled by Reuters — the last time China recorded a fall in its inflation rate was in February 2021.
Its producer price index fell 4.4% in July compared to a year ago, more than the 4.1% expected by economists polled by Reuters.
"These numbers will deepen worries about both China's growth prospects and the effectiveness of traditional stimulus measures," Mohamed El-Erian, chief economic advisor of Allianz, said in a post on X, formerly known as Twitter.
Major markets in Asia-Pacific were mixed.
Japan's Nikkei 225 slid 0.53% and closed at 32,204.33, while the Topix fell 0.4% to end at 2,282.57.
Meanwhile, South Korea's Kospi closed 1.2% up at 2,605.12 to snap a five-day losing streak, while the Kosdaq was up 1.86% to finish at 908.98. Australia's S&P/ASX 200 was also higher, gaining 0.37% to end at 7,338.
Overnight in the U.S., all three major indexes saw a selloff after Moody's downgraded the credit rating on several regional banks, citing deposit risk, a potential recession and struggling commercial real estate portfolios.
— CNBC's Brian Evans and Alex Harring contributed to this report
China consumer prices in July fall for first time in over 2 years
China's consumer price index fell for the first time in over two years, posting a 0.3% year-on-year drop in July, but rose 0.2% month-on-month.
Economists polled by Reuters expected July CPI to drop 0.4% compared to a year ago.
Producer price index slumped 4.4% year-on-year, more than the Reuters poll of 4.1%. That's compared to a 5.4% decline in June.
The offshore yuan strengthened slightly against the greenback after the announcement, trading at 7.2257.
— Lim Hui Jie, Evelyn Cheng
Nikon shares tumble 17% as net profit drops by almost 80% year-on-year
Shares of Japanese optics and imaging manufacturer Nikon tumbled as much as 17% on Wednesday, and was the biggest loser on the Nikkei 225.
The company posted a 78.3% year-on-year plunge in net profit for its first quarter, at 2.58 billion yen ($18 million) in the three months ended June.
Operating profit plunged 78.6% to 3.29 billion yen, while first quarter revenue increased to 158.15 billion yen, an 8.6% increase year-on-year.
— Lim Hui Jie
CNBC Pro: Alibaba, TSMC and more: Goldman Sachs names stocks to play 3 A.I.-related sectors
Goldman has identified artificial intelligence as one of five themes in Asia-Pacific that it's positive on.
Its screen picks out AI companies in Asia — in hardware, semiconductors and applications — that could benefit from rising AI demand.
— Weizhen Tan
South Korea unemployment rises for second straight month to 2.7%
The unemployment rate in South Korea climbed to 2.7% in July, up from 2.6% the previous month, but down 0.2 percentage points compared to the same period last year.
Government data showed the number of unemployed persons stood at 807,000 thousand people in July, a 3.5% drop year-on-year.
South Korea's employment to population ratio was at 63.2% in July, up 0.3% percentage points year-on-year.
— Lim Hui Jie
CNBC Pro: Outperforming analysts reveal 2 new oil and gas stock picks — with one expected to rise by 35%
Outperforming analysts at RBC Capital Markets have revealed two new top stock picks in the oil and gas sector.
The investment bank's basket of stock picks has surged by 145% since inception compared to its vanilla benchmark ETF, which is up only by 29.5%.
— Ganesh Rao
Regional bank stocks fall more than 3%
The SPDR S&P Regional Banking ETF (KRE) is down down 3.4% Tuesday. The basket of regional bank stocks managed to recoup some of its losses earlier in the trading session, when it lost as much as 4.3%.
KRE names leading Tuesday's losses include BankUnited, Bank of Hawaii, Fulton Financial, Citizen Financial and Zions Bancorporation. The five stocks all declined 4.5% or greater as of Tuesday morning.
— Hakyung Kim, Gina Francolla
Goldman Sachs weighs on Dow
By comparison, the blue-chip average slipped 0.8% as a whole. Four-fifths of Dow members traded below flat.
Amgen continued its post-earnings ascent and was the best performing member with a gain of 3.5%. If the stock finishes Tuesday higher, it would be the fourth straight winning session for the stock. Boeing, the next best performer, added a relatively modest 0.3%.
— Alex Harring
Health care stocks buck market slide
Health care stocks have been able to sidestep the S&P 500's leg down in Tuesday's session.
The sector was up 0.3%, making it the best performing of the 11 in the index. Energy was flat, while the other nine traded down. As a whole, the index was down about 0.7%.
Eli Lilly led the health-care sector higher, jumping nearly 14% on the back of a better-than-expected earnings. Organon & Co. was the next best performer with an advance of more than 9%, also rising after delivering a strong quarterly report and raising full-year guidance.
— Alex Harring
Philadelphia Fed President: Interest rate-hiking cycle may be finished
The U.S. central bank could be at the end of its current interest rate-hiking cycle, Philadelphia Federal Reserve President Patrick Harker said Tuesday.
"Absent any alarming new data between now and mid-September, I believe we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work," Harker said in prepared remarks for a speech in Philadelphia.
But he also said there may not be any cuts to rates in the near future.
"Allow me to be clear about one thing, however. Should we be at that point where we can hold steady, we will need to be there for a while," he said. "The pandemic taught us to never say never, but I do not foresee any likely circumstance for an immediate easing of the policy rate."
— Jeff Cox