Asian stock markets fell Friday after China reported inflation climbed again despite government efforts to control living costs, raising fears among investors that the government will take further measures to cool the country's thundering economic growth.
Oil prices hovered above $108 a barrel Friday in Asia as traders mulled a weaker U.S. dollar and signs of strong global crude demand to justify a two-month rally.
China's Shanghai Composite Index was down 0.5 percent at 3,026.44 while Hong Kong's Hang Seng Index fell 0.3 percent to 23,929.32.
Japan's Nikkei 225 stock average fell 0.7 percent to 9,583.01. South Korea's Kospi was down 0.4 percent to 2,133.17 and Australia's S&P/ASX 200 was down 0.5 percent at 4,859.70. Benchmarks in Singapore and India were also lower. Benchmarks in Indonesia and the Philippines were higher.
Data released Friday showed that Chinese consumer prices rose 5.4 percent over a year ago, driven by surging food costs. That's up from February's 4.9 percent increase and was a setback for communist leaders who have boosted interest rates four times since October and taken other steps to cool prices.
Chinese and Hong Kong stocks were at first higher after the report was released on initial relief from investors that the numbers were in line with forecasts.
But they fell after investors realized inflation is still quite high and will likely trigger another interest rate hike soon, said Jackson Wong, a vice president at Tanrich Securities.
The number is "way above Premier Wen's target (of 4 percent), so I believe usually what China's government will do when the number is far off from the target is they will try to make a big dose of tightening to make it go down," Wong said.
Indian shares fell as disappointed investors sent Infosys Technologies shares down 7 percent after the company reported that quarterly profit missed expectations because higher expenses squeezed margins.
In New York on Thursday, stock indexes were lower for most of the day after claims for unemployment benefits rose unexpectedly but pared losses after rallying late in the day.
The Dow Jones industrial average rose 14.16, or 0.1 percent, to 12,285.15. The broader Standard and Poor's 500 stock index added 0.11 point, or less than 0.1 percent, to close at 1,314.52. The Nasdaq composite lost 1.30, or 0.1 percent, to 2,760.22.
In currencies, the dollar slipped to 83.45 yen from 83.73 yen late Thursday. The euro fell to $1.4473 from $1.4503.
Benchmark oil for May delivery rose 7 cents to $108.18 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.00 to settle at $108.11 per on Thursday.