Global shares and U.S. futures fell sharply on Tuesday, with investors nervous about the potential for military conflict in Ukraine and ahead of a key Federal Reserve meeting that could offer hints about the timing and pace of rate hikes.
Benchmarks slid, with most extending losses in afternoon trade. MSCI’s broadest index of Asia-Pacific shares outside Japan shed 1.43% to its lowest in a month. The Nikkei closed down 1.66%, having earlier touched its lowest level since December 2020.
After a tumultuous session on Wall Street which saw a late rally and a higher close, U.S. share futures fell. Nasdaq futures were off 1.3% and S&P500 e-minis lost 0.95%%.
But in Europe, it looked like selling pressure would ease with pan-region Euro Stoxx 50 futures 1.16% higher and FTSE futures up 0.76%. That follows a 3.8% fall for the Euro STOXX 600 on Monday, its worst day in 18 months.
Tai Hui, Asia chief market strategist at J.P. Morgan Asset Management, said investors were facing a dilemma.
They are anxious about the outlook of monetary policy in the context of some growth stocks getting more expensive, while the growth outlook for 2022 is still decent and there are few assets that offer the same long-term return prospects like equities, he said.
“Geopolitical uncertainties in Europe this week and potential impact on energy prices further muddled the outlook,” Hui added.
The FTSE MIB climbed up by 0.80% to 26,203.20. In the cash markets, the DAX Germany was trading up by 0.93% to 15,145.65. CAC 40 in France rose by 1.13% to 6857.37 while the FTSE 100 in the U.K. was down by 0.54% to 7,336.35 ,at the time of writing.