ALBAWABA - Asian stocks fell Tuesday amid growing investor concerns over U.S. economic performance in the wake of frail manufacturing sector data and a possible rise in inflation due to plans by OPEC+ oil producing nations to cut output until the end of the year.
OPEC+, which comprises members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, said in a surprise announcement Sunday that they plan to cut output as of May, pushing oil prices higher and complicating the inflation outlook, according to Channel News Asia.
It said Brent crude was last up 0.44 percent to $85.3 per barrel, after jumping over 6 percent overnight.
Asia stocks wobble as OPEC+ output cuts, weak US data raise uncertainty https://t.co/iKpqJBCOSg pic.twitter.com/Ek8oWZxkxg
— CNA (@ChannelNewsAsia) April 4, 2023
Investors were also assessing Monday's economic data, which showed U.S. manufacturing activity in March "slumped to its lowest level in nearly three years as new orders plunged, and analysts said activity could decline further due to tighter credit conditions," Reuters reported.
Asian stocks dithered on Tuesday as investors grappled with inflation concerns in the wake of the surprise cuts to the #OPEC+ group's oil output targets, while treasury yields retreated after frail U.S. manufacturing sector data.https://t.co/1ZOVzFcXuA
— Economic Times (@EconomicTimes) April 4, 2023
"A weakening trend has been in place since May last year, but recent banking turmoil may have dented confidence further," ANZ analysts said in a note, according to Reuters.
"Manufacturing is one of the most rate-sensitive sectors of the economy as goods like autos are primarily bought on credit. There continues to be encouraging news on goods inflation."
Asia stocks wobble as OPEC+ output cuts, weak US data raise uncertainty https://t.co/nLYhi6E8EE pic.twitter.com/AwUXuhCBGq
— Reuters (@Reuters) April 4, 2023
In early European trades, the pan-region Euro Stoxx 50 futures were up 0.33 percent, German DAX futures advanced 0.39 percent and FTSE futures rose 0.35 percent, according to Reuters.
It said U.S. stock futures, the S&P 500 e-minis ESc1, were down 0.07 percent.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.4 percent, reversing early gains.
Asia stocks down on inflation, growth concerns; RBA hits pause https://t.co/QsrBhYi8Ih pic.twitter.com/uW3C2IxvyZ
— Breaking News (@feeds24x7) April 4, 2023
Japan's Nikkei stock index (.N225) rose 0.3 percent.
In Sydney, the stock market (.AXJO) edged up while the Australian dollar fell after the Reserve Bank of Australia paused its tightening cycle following 10 straight rate hikes.
China's blue-chip CSI300 Index (.CSI300) was little changed by the lunch break, while the Shanghai Composite Index (.SSEC) gained 0.22 percent.
