Australia

Australian shares are poised to fall in line with Wall Street as global markets decline amid heightened concerns over global growth. Eyes are on the start of US earnings season later this week. Brent crude oil falls below US$100.

ASX futures were down 22 points or 0.3% at 7480 as of 8.00am on Tuesday, suggesting a negative start to the day. Overnight, the S&P 500 fell 1.7%. The Dow Jones Industrial Average retreated 1.2%. The tech-heavy Nasdaq Composite declined 2.2%.

A litany of worries has short circuited a rally that saw major US indexes gain more than 10% in March. Investors are focussed on the ongoing war in Ukraine and its impact on supply chains and commodity prices as well as the threat of an economic slowdown triggered by central banks raising rates to curb inflation. Signs are also emerging China’s lockdowns are slowing economic activity in the world’s largest exporter and manufacturer, with auto sales down and consumer prices rising.

"China is weighing on people's minds quite a bit," said Ernesto Ramos, head of integrated equity at Columbia Threadneedle Investments. He said the lockdowns are "creating all kinds of supply side bottlenecks for the US consumer and for US manufacturers that rely on goods from China for their finished products."

Locally, S&P/ASX 200 closed 0.1% higher at 7485.2 after a volatile session in which technology stocks tumbled.

It was a mixed day for sectors, with financial stocks 0.8% higher but tech and consumer-discretionary stocks representing a drag, ending 0.9% and 0.7% lower, respectively.

The four major banks were up between 0.7% and 1.5%, while Macquarie fell 0.9%. Tyro lost 3.9% and Appen fell 2.7%.

Graincorp was the standout performer, jumping 6.8% in the wake of its recent earnings guidance upgrade and rising demand for Australian grains.

IGO added 2.3% after raising its takeover offer for Western Areas following a jump in nickel prices.

In commodity markets, iron ore fell 2.6% to US150.60 per tonne; gold futures gained 0.4% to $1,956.80; Brent Crude oil gave up 3.4% to US$99.30 a barrel.

The selling that has gripped bond markets for weeks continued on Monday. The US 10-Year Treasury Note yield jumped to 2.78%. The yield on the Australian 10-year bond rose to 3.00%. Yields rise when prices fall.

The Australian dollar was buying 74.16 US cents as of 8.00am on Tuesday, down from the previous close of 74.14. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, gained to 92.48.

Asia

Chinese stocks decline as the country's Covid-19 resurgence weighs on investor sentiment, Oanda analyst Jeffrey Halley said in a note. "It is China's Covid situation that is making Asia nervous," he said; "With China's government doggedly sticking to its Covid-zero policy, fears are increasing that an extended lockdown in China...will darken an already cloudy outlook for China's growth." Losses are broad-based, with sectors including liquor-makers, car makers, banks and renewable-energy companies all weaker. The Shanghai Composite Index closed 2.6% lower, the Shenzhen Composite Index fell 3.3% and the ChiNext Price Index retreated 4.2%.

Hong Kong's benchmark Hang Seng Index closed 3.0% lower, weighed down by China's Covid-19 resurgence and lockdowns in parts of the country, KGI Securities says in a research note. Hong Kong equities are facing headwinds from expectations that China's economic growth could continue slowing in April, the brokerage says. Rising US treasury yields and a strengthening US dollar are also dragging on equities, KGI adds. The declines were broad-based, led by Haidilao's 9.6% drop, followed by Country Garden Services and Sunny Optical Technology, which fell 9.1% and 8.6%, respectively.

Japanese stocks ended lower, dragged by falls in electronics and tech stocks, as concerns persisted over the war in Ukraine and its impact on commodity prices. Sony Group dropped 3.9% and medical-information platform operator M3 shed 5.3%. Meanwhile, Tokyo Electric Power Co. Holdings jumped 16% and Chubu Electric Power soared 7.4% after Prime Minister Fumio Kishida said the government plans to maximize the use of nuclear power to secure power supply. The Nikkei Stock Average fell 0.6%. Investors remain focused on the war and its trade implications.

Europe

European markets mostly fell as investors retreated amid ongoing economic uncertainty. The pan-European Stoxx Europe 600 and German DAX dropped 0.6%. The French CAC 40 edged up 0.1% after President Emmanuel Macron did better than expected in the first round of France's presidential elections.

Shares of Société Générale rose 5% after the French lender said it was selling its entire stake in Rosbank and its Russian insurance units to Interros, a conglomerate controlled by metals billionaire Vladimir Potanin.

"The prospect of a week of inflation data and central-bank decisions, topped off by the beginning of US earnings season, has led to a broadly-risk averse day for global markets," IG analyst Chris Beauchamp says. "While Chinese CPI didn't rise by a particularly terrifying amount, the PPI figure suggests the inflation surge isn't going away."

In London, closed down 0.7% on Monday, marking a poor start to the week as a decline in oil prices weighed on the energy sector, CMC Markets UK says. The threat of weakening demand from China resulting from Covid-19 restrictions being introduced in Shanghai hit the sector, and concerns about rising energy prices are in particular focus given CPI inflation data coming later in the week for the UK, it adds.

Elsewhere, International Consolidated Airlines Group SA was among the FTSE 100's biggest risers, up 2.5%, after London's Heathrow Airport said that passenger numbers in March were the highest they have been since the start of the pandemic.

North America

US stocks fell Monday as investors worried that Covid-19 lockdowns in China could exacerbate supply-chain problems and weigh on economic growth.

The war in Ukraine and the Federal Reserve's plans to tighten monetary policy to combat inflation are also fuelling anxiety about the market outlook.

The S&P 500 fell 1.7%. The Dow Jones Industrial Average retreated 1.2%. The tech-heavy Nasdaq Composite declined 2.2%.

The Nasdaq's fall builds on last week's 3.9% retreat after Fed officials signalled their intent to raise borrowing costs and shrink the central bank's balance sheet to quell inflation. Many tech stocks are valued based on expectations of growth far into the future and so are especially sensitive to rising rates. As tech stocks continued to come under pressure Monday, the S&P 500's heavily-weighted technology sector lost 2.6% for the day.

China's lockdowns in Shanghai and other industrial centers are starting to exert a drag on the country's economy. Auto sales have slumped, consumer prices have risen, and economists have lowered growth forecasts. Restrictions to contain the spread of the Omicron variant have resulted in factory shutdowns, further stressing snarled global supply chains.

"China is weighing on people's minds quite a bit," said Ernesto Ramos, head of integrated equity at Columbia Threadneedle Investments. He said the lockdowns are "creating all kinds of supply side bottlenecks for the US consumer and for US manufacturers that rely on goods from China for their finished products."

The war in Ukraine, meanwhile, has boosted commodity prices, adding to inflationary pressures. Ukraine and Russia sent reinforcements into eastern Ukraine this weekend to prepare for what may become the war's biggest battles.

US government bonds extended their selloff as investors face the likelihood of tighter monetary policy. The yield on the benchmark 10-year US Treasury note rose to 2.779%, its highest since January 2019, from 2.713% Friday. Yields, which move in the opposite direction as bond prices, have climbed for four of the past five weeks.

Lockdowns in Shanghai weighed on oil prices, sending benchmark Brent crude down 4.2% to $98.48 a barrel. The physical oil market had been weakening for several weeks in response to the shutdowns as well a planned release from strategic reserves in the US and elsewhere.

Adding to the pressure, refiners in Turkey and elsewhere have continued to buy Russian crude, reducing demand for northwest European oil, said Helge André Martinsen, senior oil analyst at DNB Markets. The energy group was the worst performer of the S&P 500's 11 sectors, falling 3.1% on the day.

Investors are preparing to get their next deep look into corporate performance as earnings season kicks off in earnest this week. With inflation raising the costs of everything from energy to labor, investors will scour company results for signs of how businesses are coping. Still, analysts expect that earnings from companies in the S&P 500 rose 4.5% in the first quarter compared with a year earlier, according to FactSet.

JPMorgan Chase, BlackRock and Delta Air Lines are due to report Wednesday, followed by Goldman Sachs, Morgan Stanley and Citigroup Thursday.

Among individual stocks, Twitter shares rose 78 cents, or 1.7%, to $47.01 after the company's chief executive said Elon Musk had decided not to join the board. Shares of Tesla, where Mr. Musk is chief executive, fell $49.56, or 4.8%, to $975.93.

AT&T, which on Friday completed the planned merger of its film-and-TV empire with Discovery, rose $1.41, or 7.7%, to $19.63. Shares of the new company, Warner Bros. Discovery, added 31 cents, or 1.3%, to $24.78.