(Bloomberg) -- Asian stocks dropped, with the regional benchmark briefly erasing its gains for the year, as mounting worries over inflation and a resurgence in Covid-19 cases soured investor sentiment.The MSCI Asia Pacific Index slid as much as 1% and was down 0.9% as of 12:52 p.m. in Tokyo, tracking losses in American shares after data on Wednesday showed U.S. consumer prices climbed in April by the most since 2009. The Asian gauge has now fallen more than 9% from a Feb. 17 peak.Tech stocks have been at the forefront of a selloff in global equities this week as an explosive rally in commodity prices threatens to push up inflation. Asia’s tech shares, which are contending with higher U.S. bond yields and stretched valuations just like their global peers, have also been hurt by regulatory tightening in China. Further, a fresh surge in infections in several countries including India, Japan and parts of Southeast Asia is weighing on regional stocks.“We need to kind of price in a more normal interest-rate environment, more normal inflation environment,” said Ken Peng, head of Asia investment strategy at Citigroup Inc.’s private-banking arm. “The shake up could last a while longer. But I’m still not too worried because, growth will comeback to be the most important element once interest rates normalize.”Technology and communication services were the worst-performing sectors on the Asian gauge Thursday.Japanese shares declined for a third day on Thursday, while stocks in China snapped a two-day winning run. Markets in Singapore, India, Indonesia, Malaysia and the Philippines were shut for a holiday. In Taiwan, the benchmark stock index extended losses after slumping the most since March last year on Wednesday partly due to concern over tightening of virus-linked restrictions.SECTORS TO WATCHStocks linked to cryptocurrencies fell in line with the slump in Bitcoin, after Tesla Inc. Chief Executive Officer Elon Musk expressed concerns over its energy usageTraditional Chinese medicine firms advanced as President Xi Jinping called for the development of the treatments after experience gained from COVID-19MARKETS AT A GLANCEJapan’s Topix index down 0.6%; Nikkei 225 down 1.8%Hong Kong’s Hang Seng Index down 1%; Hang Seng China Enterprises down 1.2%; Shanghai Composite down 0.7%; CSI 300 down 0.8%Taiwan’s Taiex index down 0.7%South Korea’s Kospi index down 0.5%; Kospi 200 down 0.7%Australia’s S&P/ASX 200 down 0.6%; New Zealand’s S&P/NZX 50 down 1.1%Thailand’s SET down 1.4%; Vietnam’s VN Index down 0.2%ADVANCERSSeven & i Holdings jumped as much as 7.4% in Tokyo as ValueAct Capital disclosed the acquisition of a 4.3% stake in the operator of convenience storesKirin rose as much as 4.3%, the most since Nov. 16, after the Japanese beer maker beat quarterly profit expectationsChina Mengniu Dairy jumped as much as 5.4% after Danone finalized its HK$15.4 billion ($1.98 billion) sale of approximately 9.8% stake in MengniuGrainCorp added as much as 8.3%, the most since Nov. 13, after the Australian agricultural company raised its FY earnings forecastHanwha Life Insurance surged as much as 8.7% after its 1Q report showed earnings jumped nearly four foldNTT climbed as much as 2.8% after the telecom giant’s quarterly profit and forecast for the current fiscal year beat analyst estimatesDECLINERSSoftBank Group declined as much as 6.7% as its record quarterly profit failed to impress a market reeling from a global selloff in tech stocksGongniu Group dropped as much as 9.7% in Shanghai after the company said it was under investigations by local authorities for monopolistic behaviorPerenti Global tumbled as much as 28%, the most since March 2020, after the Australian mining services company cut its guidanceChina Evergrande New Energy Vehicle Group sank 8.7% in Hong Kong after its parent sold 260m shares at HK$40.92 apiece, a 20% discount to last closeNexon slid as much as 17% after the game developer forecast as much as a 19% y/y decline in operating profit in 1HFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.