PUMPING PETROLEUM This March 8, 2022 file photo shows a man pumping gas into a van’s tank at a gasoline station in Brooklyn, New York. XINHUA PHOTO
PUMPING PETROLEUM This March 8, 2022 file photo shows a man pumping gas into a van’s tank at a gasoline station in Brooklyn, New York. XINHUA PHOTO

HONG KONG: Asian equities mostly sank on Tuesday and oil prices tumbled following a rout on Wall Street as anxieties were fanned over rising United States interest rates, surging inflation and the impact of China's prolonged Covid-19 lockdowns.

Stock markets have been on a tempestuous ride this year, with Wall Street suffering another hit on Monday as the tech-rich Nasdaq slumped more than 4 percent, while the S&P 500 ended below 4,000 points for the first time since March 2021.

Steep declines in China's April exports, due to Beijing's staunch adherence to a zero-Covid policy that has placed millions under lockdown, and volatility in crude partly due to Russia's invasion of Ukraine have also hastened selling.

"This rather precipitous drop in equity markets has been building for several months," said Clifford Bennett, chief economist at ACY Securities.

"The fundamentals of war, inflation, rate hikes and supply chain disruption are all individually significant headwinds. When combined, equity markets have no way through," he added.

US stock markets took a dive late last week after the Federal Reserve (Fed) raised interest rates by a half-percentage point and flagged more aggressive hikes ahead to tackle decades-high inflation.

Stoking global inflationary pressures are lockdowns in dozens of locations across China — from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket province of Jilin — wreaking havoc on supply chains in recent months.

By Tuesday afternoon, the equities plunge in Asia had eased, and European stocks in Frankfurt, Paris and London rebounded as dip buyers sent markets rallying after the wreckage from Monday's rout.

"For now, investors need to be prepared for continued volatility," Americas chief investment officer at UBS Global Wealth Management Solita Marcelli wrote in a note, according to Bloomberg.

Tokyo on Tuesday closed down 0.6 percent and Hong Kong slumped 1.84 percent as traders fretted over US monetary tightening. Drops seen in Seoul, Wellington, Singapore and Jakarta also eased on the close of day.

"Risk markets remain on shaky ground," Stephen Innes of SPI Asset Management said.

Bitcoin also slid to as low as $29,764. The digital currency has lost more than half its value since a November surge saw it hit a record of nearly $69,000.

Such a drastic drop in its value has not been seen since July 2021. By the afternoon, it saw a rebound as markets calmed.

Analysts say traditional investors tend to view Bitcoin as a riskier asset and have been offloading it along with other digital tokens in response to growing fears of market volatility.

Crude — once considered a relative safe haven — also took a beating on Monday when it dropped more than 5 percent, with the European benchmark Brent North Sea crude dropping to $106.77 a barrel, while the main US contract West Texas Intermediate (WTI) was at $103.87.

By Tuesday, the drop-off had eased, though crude was still lower, with Brent trading at about $105.72 and WTI at $102.97.