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Asian markets tumble as global energy crisis raises inflation concerns

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Asian markets tumble as global energy crisis raises inflation concerns

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MSCI’s broader Asia-Pacific equity index outside of Japan fell 0.9% in early trading, after US stocks closed the previous session with slight losses. US stock futures, the S&P 500 e-minis, fell 0.43%.

Asian stocks fell and the safe-haven dollar held firm on Tuesday as a global energy crisis stoked inflation fears, tarnishing investor sentiment ahead of America’s corporate earnings season.

MSCI’s broader Asia-Pacific equity index outside of Japan fell 0.9% in early trading, after US stocks closed the previous session with slight losses. US stock futures, the S&P 500 e-minis, fell 0.43%.

Australian stocks fell 0.29%, while Japan’s Nikkei stock index fell 1.03%.

China’s top-line CSI300 Index was down 0.75%, while Hong Kong’s Hang Seng Index opened 1.35%.

“Risk markets had a mixed start to the week amid a light data flow and ahead of the US earnings season,” ANZ analysts said in a note.

“Economies appear to be entering a more challenging phase of the cycle and we believe investors and companies will be monitoring the decline in economic data and earnings results before making short-term management assessments.”

Also influencing investor sentiment, Reuters reported that some of China Evergrande Group’s offshore bondholders have not received interest payments before Monday’s deadline. Rivals Modern Land and Sinic became the latest developers struggling to delay bond payment terms.

Evergrande’s debt problems and contagion concerns have triggered shockwaves in global markets in recent months and the company has no longer paid off the dollar bonds, worth a combined $ 131 million, which are maturing. September 23 and 29.

Wall Street’s major indices ended a choppy session to the downside on Monday as investors got nervous ahead of the third-quarter earnings reporting season.

A rally in commodities and energy stocks due to rising oil prices initially boosted major US stock indices. But earnings faded amid earnings concerns, which will begin with JPMorgan Chase & Co’s results on Wednesday.

Some analysts expect companies to report slowing growth due to bottlenecks in the supply chain and rising prices. They warned that this could lead to a drop in US stocks.

JPMorgan shares fell 2.1% and are among the biggest losses for the S&P 500, which lost 0.69% to 4,361.19.

The Dow Jones Industrial Average fell 0.72% to 34,496.06, while the Nasdaq Composite fell 0.64% to 14,486.20.

After last week’s US data showed weaker-than-expected job growth in September, the focus now shifts to inflation and this week’s retail sales figures. Investors also expect the Federal Reserve to begin tightening policy by announcing a reduction in its massive bond buying next month.

The prospect of accelerating inflation and tighter monetary policy raised bond yields.

The yield on the benchmark 10-year yield touched 1.6136% after a sharp rise on Monday. The two-year yield rose to 0.3517%, up from its US close of 0.318%.

The dollar index, which tracks the dollar against a basket of currencies from other major trading partners, rose to 94,423.

Gold, generally seen as a hedge against inflation, was slightly lower. Spot gold was trading at $ 1,753.55 an ounce.

Oil prices, which had risen on Monday due to the recovery in demand and supply cuts, fell slightly and US crude fell 0.36% to $ 80.23 a barrel. Brent crude fell to $ 83.39 a barrel.

(Text input from Reuters)

First published: IST

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Asian markets tumble as global energy crisis raises inflation concerns

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