Asia shares fall as global energy crunch fuels inflation worries

On Tuesday, Asian stocks fell and the safe-haven currency stayed steady as a worldwide energy shortage fueled inflation fears, clouding market sentiment ahead of the U.S. corporate earnings season.

MSCI’s broadest index of Asia-Pacific equities outside Japan was down 0.9 percent in early trade, following a slight fall in US markets the previous day. The S&P 500 e-mini futures in the United States declined 0.43 percent.

The Australian share market fell 0.29 percent, while Japan’s Nikkei stock index fell 1.03 percent.

China’s blue-chip CSI300 index fell 0.75 percent, while Hong Kong’s Hang Seng index fell 1.35 percent.

“Risk markets started the week mixed amid limited data flow and ahead of the US earnings season,” ANZ analysts wrote in a report.

“Economies look to be entering a more difficult period of the cycle, and we believe investors and corporations will be watching how economic data and profit outcomes fall before making evaluations of near-term direction.”

Reuters also reported that some of China Evergrande Group’s offshore bondholders had not received interest payments by a Monday deadline, which weighed on market mood. Modern Land and Sinic are the latest developers to scramble to postpone bond payment deadlines.

Evergrande’s debt problems and contagion fears have sent shockwaves across global markets in recent months, and the company has already missed payments on dollar notes worth a total of $131 million that were due on September 23 and September 29.

Wall Street’s major indexes finished a turbulent session lower on Monday, as investors became anxious ahead of the third-quarter results season.

Initially, a rise in basic materials and energy stocks on rising oil prices buoyed key US stock indices. However, the gains were short-lived due to concerns over earnings, which are slated to begin on Wednesday with JPMorgan Chase & Co (NYSE:JPM) results.

Some analysts predict that corporations will report slower growth as a result of supply-chain issues and increased prices. They cautioned that this could cause a decrease in US stock prices.

JPMorgan shares were down 2.1 percent, weighing heavily on the S&P 500, which down 0.69 percent to 4,361.19.

The Dow Jones Industrial Average was down 0.72 percent to 34,496.06, while the Nasdaq Composite was down 0.64 percent at 14,486.20.

Following last week’s data showing weaker-than-expected job growth in September, the focus this week moves to inflation and retail sales figures. Investors also expect the Federal Reserve to begin tightening policy next month by announcing a reduction in its mammoth bond-buying program.

Bond yields rose in response to the likelihood of rising inflation and tighter monetary policy.

After a big jump on Monday, the yield on the benchmark 10-year note reached 1.6136 percent. The two-year yield increased to 0.3517 percent, up from 0.318 percent at the closing in the United States.

The dollar index, which measures the value of the US currency against a basket of currencies from major trading partners, was up at 94.423.

Gold, which is commonly used as a hedge against inflation, was somewhat lower. The spot price of gold was $1753.55 per ounce. [GOL/]

Oil prices, which had risen on Monday due to rising demand and supply cuts, fell slightly, with U.S. oil falling 0.36 percent to $80.23 a barrel. Brent crude has dropped to $83.39 a barrel.

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