Asian markets slump on Mideast crisis weak growth outlook

HONG KONG, China — Asian markets were weighed down on Tuesday in anticipation of key earnings and economic data releases later in the week and the ongoing crisis in the Middle East.

Some indexes in New York rebounded after a sluggish start but the S&P 500 suffered its lowest close since May on Monday over volatile US Treasury yields and that uncertainty transferred to the Asian trading day.

The rise in bond yields has worsened worries that Federal Reserve interest rates will stay higher for longer, denting the growth outlook.

Markets in Tokyo and Hong Kong both dipped in early trade.

"The rise of the 10-year US bond yield and worries that the Middle East situation may deteriorate continued to weigh on the Tokyo market."

Those concerns, as well as an upcoming report on third-quarter US growth and September personal income and spending that includes key inflation data, hampered positive moves in Hong Kong and other trading floors.

"The current economic environment presents a confusing backdrop, making it incredibly challenging to make a definitive equity market trading assessment," said Stephen Innes of SPI Asset Management.

"Geopolitical concerns and a weaker growth outlook are seemingly weighing more heavily on equities."

But Shanghai was trading slightly higher after its worst start to the week in months on Monday after China's sovereign wealth fund purchased exchange-traded funds to boost the country's diving stock markets.

Meanwhile, Europe's major bourses had been largely flat in Monday trade, with London finishing just off while Paris and Frankfurt nudged into the green.

The war in Gaza had also hammered oil prices on Monday after major gains last week and crude was once again higher in Asian trade.

"Geopolitical risks have led to divergent movements in commodity markets," Innes said. 

"While geopolitical tensions have contributed to a rising geopolitical risk premium for oil, no physical oil supply disruptions have occurred, taking some of the heat out of the rally."

Hong Kong - Hang Seng Index: DOWN 0.3 percent at 17,114.52

Tokyo - Nikkei 225: DOWN 0.6 percent at 30,828.59  

Shanghai - Composite: UP 0.7 percent at 2,959.47 

Dollar/yen: DOWN at 149.59 yen