SINGAPORE, Oct. 5 (BNA) Asian stocks incurred heavy losses early Tuesday after a widespread sell-off on Wall Street, as markets feared the impact of multi-year high oil prices at a time when supply chain turmoil is already triggering. pressure on economic activity.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell as much as 1.3%, down for the third consecutive session. Japanese shares tumbled 2.8%, South Korean shares tumbled 2.5%, and Australian shares tumbled 1%.
“It is clear that investors are concerned about inflation due to supply chain disruptions and rising energy prices,” Reuters quoted Vasu Menon, executive director of investment strategy at OCBC Bank, as saying.
The drop in the markets lifted the main MSCI index to 619.87, the lowest since November 2020. It has fallen more than 5% this year, with Hong Kong and Japanese markets among the biggest losers.
“We’ve seen that tech stocks outperform value stocks, so if inflation remains a concern, tech stocks tend to take a hit,” Menon said.
Oil prices reached their three-year peak on Monday after OPEC+ confirmed that it will stick to its current production policy as demand for petroleum products recovers, despite pressure from some countries to increase production further.
The price of US oil settled at $77.60 a barrel, a day after hitting its highest level since 2014. Brent crude settled at $81.30 a barrel after rising to a three-year high.
The focus of the market in Asia will be on whether the troubled property developer China Evergrande offers any respite for investors looking for signs of an asset dump. Shares in the company ceased trading on Monday.
The Dow Jones Industrial Average fell 0.94% to 34002.92, the S&P 500 lost 1.30% to 4300.46 and the Nasdaq Composite fell 2.14% to 14255.49 as investors dumped Big Tech shares in the face of rising Treasury yields.
US Treasury yields rose as investors cautioned about the need to raise the government’s debt ceiling as the US faces the risk of a historic default within two weeks.
In late trading on Wall Street, the US Senate prepared to vote on a bill passed in the House that would extend the US debt limit to December 2022, clearing one deadlock in Congress that has worried investors.
The US dollar traded near a one-year high against its major peers ahead of key US jobs data due at the end of the week that may provide clues to the timing of the Fed’s stimulus cut and the start of interest rate increases.
The dollar index, which measures the greenback against a basket of six currencies, rose 0.09% to 93.928.
The euro fell 0.13 percent to $1.1605, while the yen rose 0.12 percent to $111.
Gold prices were confined to a narrow range and settled at $1,763 an ounce, after rising on Monday to the highest level since September 23rd.
HF