Hong Kong, Oct 12 (BNA): Asian stocks fell and the dollar remained a safe haven on Tuesday, as the global energy crisis fueled inflation fears, clouding investor sentiment ahead of US corporate earnings season.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.9% in early trade, after US stocks ended the previous session with moderate losses. US stock futures, the S&P 500 e-minis, were down 0.43%.
Australian shares fell 0.29% while Japan’s Nikkei slid 1.03%.
China’s excellent CSI300 Index is down 0.75%, while Hong Kong’s Hang Seng Index opened 1.35% lower.
“Risk markets had a mixed start to the week amid a light data flow and ahead of US earnings season,” ANZ analysts said in a note.
“It appears that economies are entering a more challenging phase of the cycle and we believe investors and companies will be watching how the economic data and earnings results decline before making assessments of near-term direction.”
Also affecting investor sentiment, Reuters reported that some of China Evergrande Group’s overseas bondholders did not receive interest payments by Monday’s deadline. Rivals Modern Land and Sinic have become the latest developers to scramble to push back bond payment deadlines.
Evergrande’s debt problems and contagion fears have sent shockwaves through global markets in recent months, and the company has already lost dollar bond payments, totaling $131 million, that were due on September 23 and September 29.
Wall Street’s major indexes ended a choppy session lower on Monday as investor nervousness increased ahead of the third-quarter earnings reporting season.
The rally in basic materials and energy stocks due to higher oil prices initially lifted the major US stock indexes. But the gains faded amid concerns about earnings, and they are due to start with the results of JPMorgan Chase & Co on Wednesday.
Some analysts expect companies to report a slowdown in growth due to supply chain hurdles and higher prices. They warned that this could lead to a decline in US stocks.
Shares of JPMorgan fell 2.1% and among the biggest declines were the S&P 500, which lost 0.69% to 4,361.19.
The Dow Jones Industrial Average fell 0.72% to 34496.06, while the Nasdaq Composite fell 0.64% to 14486.20.
After US data last week showed weaker-than-expected job growth in September, the focus now turns to inflation and this week’s retail sales numbers. Investors are also expecting the Fed to begin tightening policy by announcing that it will scale back its massive bond purchases next month.
The prospect of accelerating inflation and monetary tightening have lifted bond yields.
The benchmark 10-year yield touched 1.6136% after a strong rally on Monday. The two-year yield rose to 0.3517%, up from its US close of 0.318%.
The dollar index, which measures the greenback against a basket of the currencies of other major trading partners, rose to 94.423.
Gold, which is usually seen as a hedge against inflation, was slightly lower. Spot gold was trading at $1,753.55 an ounce.
Oil prices, which jumped on Monday due to a rebound in demand and supply cuts, fell slightly with US crude dropping 0.36% to $80.23 a barrel. Brent crude fell to $83.39 a barrel.
HF