Contracts for the Euro Stoxx 50 slipped more than 1%, taking the shine off a 1.7% jump for the index on Monday. Contracts for the S&P 500 also dropped after initially rising early on Tuesday. Shares in South Korea and Australia each tumbled more than 1%.
The pressure facing stocks followed the sharp swings last year that saw 20% in value wiped from global equities, the worst run since the financial crisis. Bonds lost 16% of value, the biggest decline since at least 1990 for one leading measure, as central banks hiked interest rates to slow inflation.
“We’re starting the year with tight financial conditions, a potential inflation pulse coming out of China and by extension that means we’ll probably have to go into the start of this calendar year relatively cautious across the whole portfolio,” Marc Franklin, senior portfolio manager for Manulife Investment Management, said in an interview with Bloomberg Television.as much as 0.8% against the dollar to trade at the highest level since June.
An index of the dollar rose. There was no cash Treasuries trading in Asia given Japanese markets are shut on Tuesday.Elsewhere in markets, oil declined while the price of US natural gas fell as warmer weather was expected to reduce demand for heating. A private China purchasing managers index contracted for the fifth consecutive month. Other data on the docket includes German unemployment claims.Australia’s S&P/ASX 200 fell 1.8%CurrenciesThe Japanese yen rose 0.4% to 130.