Australia

Australian shares are poised to drop again at the open after US equities fell steeply.

ASX futures were down 102 points or 1.4% at 7175 as of 6.15am on Wednesday, suggesting a negative start to the last day.

U.S. stocks fell, extending their April losses, as investors digested earnings reports from leading companies and weighed concerns about inflation and the spread of Covid-19 in China.

Stocks slid for much of Tuesday, dropping further late in the session. The S&P 500 closed down 2.8%, or 120.92 points, to 4175.20, a day after tech stocks led major indexes higher. The Dow Jones Industrial Average declined 2.4%, or 809.28 points, to 33240.18, while the Nasdaq Composite lost 4%, or 514.11 points, finishing at 12490.74.

All three indexes are on track to lose at least 4% this month, with the technology-heavy Nasdaq -- which on Tuesday posted its largest one-day percentage decline since September 2020 -- down more than 12% in April. The small-cap Russell 2000 finished the day at its lowest close since December 2020.

Locally, the Australian share market has suffered its worst session in two months, with brutal losses for the major miners and oil producers as China's strict COVID policies weighed on commodity prices.

The benchmark S&P/ASX200 index closed down 155.3 points or 2.1 per to 7,318 cent on Tuesday, while the broader All Ordinaries fell by 164.2 points, or 2.1 per cent, to 7,604.

It was the worst day for the local bourse since February 24, the day Russia invaded Ukraine, and follows a rout of global markets on Friday, when the major Wall Street indexes fell by nearly three per cent.

"Obviously the (global) markets have been in turmoil while we've been on holiday, and we're playing catchup," said Julia Lee, chief investment officer with Burman Invest.

Ms Lee pinned the losses on concerns that China's zero-COVID strategy would disrupt demand for commodities. There's been panic buying in Beijing, which is mass testing its 21 million residents, amid fears the city would be plunged into a full lockdown.

Tuesday's drop put the ASX200 in negative territory for the year once again, after the index spent much of February and March climbing out of January's sharp decline. It's now down 1.7 per cent for the year.

The heavyweight materials sector was the worst hit, falling 5.1 per cent as the price of iron ore dropped to its lowest level since late February.

Fortescue Metals fell by 6.9 per cent to $19.76, BHP retreated 5.8 per cent to $45.66, Rio Tinto dipped 4.3 per cent to $108.76 and South32 dropped 7.9 per cent to $4.46.

Mining services contractor Mineral Resources fell 9.9 per cent and BlueScope Steel dropped 8.7 per cent.

Goldminers were no safe haven, with Northern Star down 4.9 per cent and Newcrest falling 2.9 per cent.

The energy sector was down 4.0 per cent after oil prices fell overnight, with Santos down 4.3 per cent and Woodside Petroleum retreating 4.6 per cent after announcing production was down slightly in the March quarter.

EML Payments plunged 38.6 per cent to a two-year low of $1.665 after slashing full-year earnings guidance by 8 per cent, with the Brisbane card payments company saying it was experiencing "operational execution issues in Europe" that it expects to continue through midyear.

Pushpay soared 22.9 per cent to $1.18 after the Auckland-based donation processor for churches said it had received unsolicited expressions of interest from third parties interested in buying the company.

Beach Energy fell 3.9 per cent after the oil producer announced that heavy rain had delayed work at its wells in South Australia's Cooper Basin, contributing to a drop in oil production for the March quarter.

Meanwhile a lack of rain was hurting earnings for United Malt Group, which said it would incur $20 million to $25 million in costs from last year's severe drought in Canada.

The world's fourth-biggest commercial maltster had been forced to import barley from Australia and Denmark to its processing plants in North America. UMG shares finished down

The big four banks were all down, with NAB dropping 1.2 per cent to $32.74, Westpac falling 1.3 per cent to $23.90, ANZ dipping 0.6 per cent to $27.62 and Commonwealth falling 0.6 per cent to $104.75.

Australian inflation figures for the March quarter will be released today, while US tech giants Microsoft and Alphabet will release quarterly earnings figures.

In commodity markets, iron ore rose 2.4% to $US138.95 a tonne; gold futures gained 0.1% to $US1900.46 an ounce; Brent crude oil added 3.2% to $US105.55 a barrel.

In local bond markets, the yield on the Australian 10 Year bond was 3.10%.

The Australian dollar fell 0.7% to 71.31 US cents.

Asia

On Tuesday, Chinese stocks fell further after suffering the worst selloff in more than two years on Monday amid mounting worries over the economic impact of the country's Covid-19 lockdowns.

Coal miners and software companies dragged on the market, though individual stocks gained post-earnings. The Shanghai Composite Index lost 1.4%, the Shenzhen Composite Index dropped 2.1% and the ChiNext Price Index closed 0.9% lower.

Hong Kong stocks ended the session higher as sentiment was supported by the Chinese central bank's move to cut the foreign exchange reserve requirement ratio in a bid to support the weakening yuan. The benchmark Hang Seng Index edged up 0.3%. Chinese tech giants led the rise, following the sector's gains on Wall Street overnight.

The Nikkei Stock Average advanced 0.4%, helped by gains in electronics stocks as concerns over borrowing costs eased somewhat. Fujitsu advanced 2.2% following news that it is considering selling a stake in its scanner unit. Notable decliners included Sumitomo Metal Mining, which ended 6.8% lower after it discontinued a feasibility study for a nickel refinery in Indonesia.

Europe

European markets mostly edge lower after a downbeat start to trading on Wall Street.

The Stoxx Europe 600, CAC 40 and DAX fall 0.9%, 0.5% and 1.2% respectively and the FTSE 100 is a touch higher. Still, Brent crude rises 2.6% to $104.84 a barrel and gold and silver prices trade mixed. The Dow drops 1.7%.

"Tuesday has seen US markets drop rapidly, taking the shine off European markets as well," IG analyst Chris Beauchamp says in a note. "Investors are back to fretting about economic growth, returning to the theme that dominated at the end of last week."

North America

U.S. stocks fell, extending their April losses, as investors digested earnings reports from leading companies and weighed concerns about inflation and the spread of Covid-19 in China.

Stocks slid for much of Tuesday, dropping further late in the session. The S&P 500 closed down 2.8%, or 120.92 points, to 4175.20, a day after tech stocks led major indexes higher.

The Dow Jones Industrial Average declined 2.4%, or 809.28 points, to 33240.18, while the Nasdaq Composite lost 4%, or 514.11 points, finishing at 12490.74.

All three indexes are on track to lose at least 4% this month, with the technology-heavy Nasdaq -- which on Tuesday posted its largest one-day percentage decline since September 2020 -- down more than 12% in April. The small-cap Russell 2000 finished the day at its lowest close since December 2020.

Shares of Microsoft fell more than 2% in after-hours trading after the software company announced first-quarter earnings and revenue above analysts' expectations. Google parent Alphabet reported slower sales growth in the first quarter, sending its shares down more than 4% after the close.

Fears about a resurgence of Covid-19 cases in China, and strict lockdowns imposed to fight the outbreak there, have heightened investors' concerns about the global economy and prompted choppy trading in recent sessions. Inflation is weighing on companies and consumers, while the Federal Reserve's indications that it will quickly tighten monetary policy threaten to drag on growth.

Assets considered havens in times of trouble, such as Treasury bonds, are being pressured by inflation and expectations for tighter central-bank policy along with stocks, complicating matters for investors seeking shelter during recent volatility. Gold, another haven, rose 0.4% on Tuesday, but prices remain near their lowest level since February.

The yield on the 10-year U.S. Treasury note closed at 2.773%, down from Monday's 2.825%. The yield on the benchmark note remains close to its highest level since 2018 as investors have sold bonds in anticipation of higher interest rates. Bond yields rise as prices fall.

Meanwhile, a measure of the yield on 10-year Treasury when adjusted for inflation -- sometimes known as the real yield -- has risen toward positive territory, closing Monday at minus 0.10%, which may make riskier assets less attractive to investors.

In other earnings news, General Electric fell more than 10%, or $9.29, to $80.59 after warning that supply-chain disruptions would pressure its business this year. Universal Health Services lost nearly 10%, or $13.44, to close down at $125.32 after the hospital operator said earnings fell 27% in the first quarter from a year ago.

United Parcel Service fell about 3.5%, or $6.59, to $183.05. The company said quarterly revenue rose more than 6%, though it shipped fewer packages than it did in the year-ago quarter. 3M, which reported better-than-expected first-quarter sales, fell 3%, or $4.38, to $144.22.

Tesla, shares of which jumped last week after the electric-vehicle maker reported quarterly results, were down 12%, or $121.60, to $876.42, retreating to levels last seen in late March. The stock is part of the S&P 500's consumer discretionary sector, which fell almost 5%.