Nikkei:10,617.83 (–18.15) Hang Seng:23,164.03 (–320.27) Shanghai Comp:2,773.16 (–25.60)

INFLATION FEARS drove Asian markets down to their worst performance in three weeks yesterday, as Hong Kong stocks fell to the lowest level this year in the wake of China’s interest rate rise.

The Hang Seng’s property sub-index fell 2.4 per cent with mainland developers hit the hardest, New World Development dipped 4.2 per cent to HK$13.84 and Sino Land losing 4 per cent to HK$14.

Hang Lung Properties, a Hong Kong-based company that gets about 16 per cent of sales from China, lost 3.5 per cent to HK$31.65. Agile Property Holdings, which builds homes in China’s southern Guangzhou province, was down 1.7 per cent to HK$11.68.

Expectations of softer demand for commodities saw CNOOC, China’s biggest offshore oil explorer, drop 2.8 per cent to HK$16.42 while Jiangxi Copper, China’s producer of the red metal, slipped 2.9 per cent to HK$24.80.

Seoul’s Kospi index lost 1.4 per cent to 2,045.58 as investors braced for tomorrow’s central bank rate-setting meeting. Profit-taking hit carmakers with Hyundai falling 2.8 per cent to Won176,000. – (Copyright The Financial Times Limited 2011)