HONG KONG (Businesshala) – Asian shares fell and the safe-haven dollar strengthened on Tuesday, as the global energy crisis fueled inflation fears, dampening investor sentiment ahead of US corporate earnings season.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.9% in early trade, as US stocks ended the previous session with light losses. US stock futures, the S&P 500 E-Minis, fell 0.43%.
Australian shares slipped 0.29% while Japan’s Nikkei stock index fell 1.03%.
China’s blue-chip CSI300 index was down 0.75%, while Hong Kong’s Hang Seng index opened down 1.35%.
“The risk markets had a mixed start to the week ahead of the light data flow and US earnings season,” analysts at ANZ said in a note.
“The economy is entering a more challenging phase of the cycle and we expect investors and corporates to monitor how economic data and earnings results fall before assessing near-term direction.”
Also weighing on investor sentiment, Businesshala reported that some offshore bondholders in China Evergrande Group have not received interest payments by Monday’s deadline. Rivals Modern Land and Cynic became the latest developers scrambling to delay bond payment deadlines.
Evergrande’s debt problems and transition concerns have sent shock waves across global markets in recent months and the firm has already missed payments on dollar bonds, a combined 131 due on September 23 and 29. million dollars in value.
Wall Street’s main indices ended a choppy session on Monday as investors panicked ahead of the third-quarter earnings reporting season.
A rally in basic materials and energy stocks on higher oil prices initially lifted major US stock indices. But gains faded amid concerns about earnings with JPMorgan Chase & Co.’s results on Wednesday.
Some analysts expect companies to report slower growth due to supply-chain disruptions and rising prices. He warned that this could lead to a fall in US stocks.
Shares of JPMorgan were down 2.1% and were among the biggest drags on the S&P 500, falling 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 is now on inflation and retail sales data this week. Investors also expect the Federal Reserve to begin tightening policy next month by announcing a tapering of its massive bond-buying.
Accelerating inflation and the prospect of a tighter monetary policy boosted bond yields.
The yield on the benchmark 10-year yield rose to 1.6136% after a strong gain on Monday. The two-year yield rose to 0.3517%, close to the US’s 0.318%.
The dollar index, which tracks the greenback against a basket of currencies from other major trading partners, was at 94.423.
Gold, generally seen as a hedge against inflation, was slightly undervalued. Spot gold was trading at $ 1753.55 an ounce. [GOL/]
Oil prices, which had jumped on Monday due to lackluster demand and supply cuts, fell 0.36% to $80.23 a barrel with US crude. Brent crude fell to $ 83.39 a barrel.