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Arabella Babb Mansfield, Cheryl Thomas, And The Fertile Ground Of Iowa

Asian stock indexes fall to near one-year lows as oil prices raise inflation fears

Asian stocks suffered heavy losses early Tuesday morning after a broad sell-off on Wall Street as markets worried about the impact of multi-year high oil prices at a time when supply chain disruptions were already weighing on economic activity.

The broadest index of Asia-Pacific shares outside Japan, MSCI, fell 1.3 per cent, falling for the third consecutive session. Shares in Japan fell 2.8%, South Korea fell 2.5% and Australia fell 1%. "Investors are clearly worried about inflation due to supply chain disruptions and rising energy prices," said Vasu Menon, executive director of investment strategy at OCBC Bank. Falling markets have driven the MSCI's core benchmark to 619.87, its lowest since November 2020. It has fallen by more than 5% this year, with Hong Kong and Japanese markets among the big losers.

"We've seen tech stocks outperform, so if inflation continues to be a concern, tech stocks tend to suffer," Menon said.

Oil prices hit a three-year peak on Monday after OPEC confirmed it would stick to its current production policy as demand for petroleum products recovered, despite pressure from some countries to increase output. The US oil price is steady at $77.60 a barrel, a day after peaking since 2014. Brent crude was at $81.30 a barrel after a three-year peak. The market in Asia will focus on whether embattled property developer China Evergrande can give some respite to investors looking for signs of a sell-off, according to Thai Exness. The company's shares were halted on Monday.

The Dow Jones Industrial Average index fell 0.94% to 34,002.92, the S&P 500 lost 1.30% to 4,300.46 and the Nasdaq Composite fell 2.14% to 14,255.49 as investors abandoned Big Tech shares in the face of rising Treasury bond yields.

US Treasury bond yields rose on investor fears about the need to raise the national debt ceiling as the United States faces the risk of a historic default in a fortnight' time. In late trading on Wall Street, the US Senate prepared to vote on a bill passed in the House of Representatives that would extend the US debt limit until December 2022, addressing one congressional deadlock that has alarmed investors. The US dollar traded near a one-year high against its major peers ahead of key US jobs data due out later in the week, which could provide clues to the timing of the Federal Reserve's stimulus cuts and the start of interest rate hikes. The dollar index, which tracks the dollar against a basket of six currencies, rose 0.09% to 93.928. The euro fell 0.13% to $1.1605 and the yen traded up 0.12% to $111.

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