An extended sell-off amid rising inflation expectations and valuation concerns saw Asian stocks hitting their lowest in seven weeks on Wednesday. A cautious undertone prevailed as investors awaited U.S. consumer inflation data due out later in the day for direction.

Chinese shares rose as the U.S. agreed to remove Xiaomi from a blacklist that would have barred Americans from investing in the Chinese smartphone maker.

The benchmark Shanghai Composite Index climbed 20.91 points, or 0.6 percent, to 3,462.75, while Hong Kong’s Hang Seng Index advanced 217.23 points, or 0.8 percent, to 28,231.04.

Japanese stocks fell sharply to extend losses from the previous session as investors fretted over the accelerating daily coronavirus infection rates caused by highly contagious variants of the virus. According to the Health Ministry, the number of COVID-19 patients with severe symptoms in Japan rose to a record 1,176.

The Nikkei 225 Index tumbled 461.08 points, or 1.6 percent, to 28,147.51, while the broader Topix ended 1.5 percent lower at 1,877.95.

Market heavyweight SoftBank Group plunged 3.5 percent, while automaker Toyota Motor climbed 2.2 percent after more than doubling its fourth quarter net profit.

Nissan Motor plummeted more than 10 percent. The company said it expects to break even this business year, defying expectations for a return to profitability.

Australian markets fell for a second straight day despite the government unveiling a big spending budget to spur the country’s rebounding economy.

The benchmark S&P/ASX 200 Index dropped 52.10 points, or 0.7 percent, to 7,044.90, while the broader All Ordinaries Index ended down 50.50 points, or 0.7 percent, at 7,281.10.

Commonwealth Bank rose over 1 percent after the lender reported third quarter cash profits that doubled from last year to A$2.4 billion. The other three big banks ended down between 0.6 percent and 1.2 percent.

Mining heavyweights BHP and Rio Tinto posted modest losses, while smaller rival Fortescue Metals Group advanced 1.4 percent. Tech shares saw modest gains, with Xero rising 2.3 percent.

Trading in shares of Carsales.Com was halted after the vehicle classifieds site confirmed it is raising $600 million to fund the purchase of a 49 percent stake in U.S. branded marketplace platform Trader Interactive.

CSR surged 4.2 percent after the building materials firm reinstated a final dividend of 14.5 cents and said it will also pay a special 9.5-cent dividend.

In economic news, the total number of building permits issued in Australia was up a seasonally adjusted 17.4 percent sequentially in March, official data showed. That matched expectations following the 20.1 percent jump in February.

Seoul stocks tumbled as foreign investors dumped local shares on growing worries over inflation and possibly earlier rate hikes. The benchmark Kospi slumped 47.77 points, or 1.5 percent, to 3,161.66.

Chemical maker LG Chem led losses to end 5.3 percent lower and pharmaceutical firm Celltrion gave up 3 percent, while market heavyweight Samsung Electronics declined 1.5 percent and No. 2 chipmaker SK Hynix lost 2.9 percent.

Investors ignored data showing that unemployment in South Korea dropped to an eight-month low in April. The number of people employed also rose at the fastest pace in nearly seven years, suggesting that the economy is well on the road to recovery.

New Zealand shares extended losses, with the benchmark NZX-50 index ending down 74.98 points, or 0.6 percent, at 12,564.21. Exporter Fisher & Paykel Healthcare dropped 1.5 percent, while A2 Milk shares rebounded to close 0.2 percent higher. Pushpay Holdings climbed 1.9 percent after releasing its annual results.

Taiwan’s benchmark index fell more than 4 percent after reports that the country may raise the COVID-19 alert level in the coming days, which would lead to the closure of shops dealing in non-essential items.

U.S. stocks ended lower overnight as positive data on job openings added to concerns over inflation.

The tech-heavy Nasdaq Composite plunged as much as 2.2 percent before ending 0.1 percent lower, while the Dow dropped 1.4 percent and the S&P 500 shed 0.9 percent.

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