Asian equities declined on concerns about China and the U.S. rate rise. UK CPI comes in as expected.

The majority of Asian markets declined on Wednesday as investors lost interest in risky assets amid new indications that China's economy is deteriorating and resurgent concerns about a hawkish U.S. Federal Reserve.

Stronger-than-expected U.S. retail sales data indicated further potential upside pressure for inflation, providing a hawkish picture for interest rates in the largest economy in the world. This led to regional markets taking a negative lead-in from Wall Street.

Local equities were impacted by weak house price data that exacerbated worries about China's troubled real estate market, while Asian technology companies suffered precipitous losses due to Fed-related worries.

Data released on Wednesday revealed that, despite gradual governmental assistance, the housing market in China continued to contract in July. The reading raised worries about a possible debt catastrophe in the industry.

Markets were concerned about a possible contagion effect from a Country Garden failure, especially for the developer of real estate's largest bondholders.

The People's Bank of China unexpectedly reduced interest rates on Tuesday, but analysts said the bank needs to do more to boost development rather than simply lowering rates.

Asian technology equities were also adversely affected by a rise in U.S. Treasury rates following stronger-than-anticipated retail sales figures for July, in addition to headwinds from China.

The U.S. retail sales report follows up on July's robust inflation readings and may offer the Fed additional motivation to maintain its hawkish stance in the months ahead. A situation like this is not favorable for volatile stocks, especially IT companies.

Over in the UK, CPI figures came in as expected. However, Core CPI came in marginally higher. A mixed signal for the Bank of England and its future monetary policy decisions.

(Sources: investing.com, reuters.com)