Asian stocks fell dramatically, and the safe-haven dollar maintained around a two-decade high as Wall Street reached a certified bear market milestone on worries that aggressive interest rate hikes in the United States would force the world’s largest economy into recession.
MSCI‘s broadest index of Asia-Pacific shares outside Japan fell 0.45% in volatile trade, clawing back some of its earlier losses.
The region’s benchmark S&P/ASX200 closed 3.55% lower while Japan’s Nikkei was down 1.32%, having fallen as much as 2% earlier in the session.
However, investors appeared to be shaking off the gloom heading into European trade with the pan-region Euro Stoxx 50 futures up 0.83%.
The yield on benchmark 10-year Treasury notes rose to 3.3466% compared with its U.S. close of 3.371% on Monday.
A key part of the yield curve inverted for the first time since April as investors braced for the prospect that Fed attempts to stem soaring inflation would dent the economy.
The dollar index was at 104.98, just off a two-decade peak of 105.29 it hit on Monday – its highest level since 1987.