Major indexes in China and Korea fall at least 1% as oil’s recent rally pauses

SINGAPORE — Shares in Asia-Pacific tumbled on Tuesday, with major indexes in China and South Korea falling at least 1%.

The Hang Seng index in Hong Kong dropped 1.72%, as of its final hour of trading.

Shares of China Evergrande New Energy Vehicle, on the other hand, surged more than 5% after the firm vowed on Monday to start producing electric vehicles next year. The company is linked to debt-laden developer Evergrande, which has already missed multiple coupon payments for its bonds in recent weeks.

Mainland Chinese stocks closed lower, with the Shanghai composite down 1.25% to 3,546.94 while the Shenzhen component dropped 1.616% to 14,135.38.

South Korea’s Kospi dropped 1.35% to close at 2,916.38. In Japan, the Nikkei 225 slipped 0.94% to 28,230.61 while the Topix index shed 0.7% to finish the trading day at 1,982.68.

Australian stocks erased earlier gains as the S&P/ASX 200 shed 0.26% to close at 7,280.70.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2%.

Oil prices were lower in the afternoon of Asia trading hours, taking a pause following a recent surge above $80. International benchmark Brent crude futures dipped 0.29% to $83.41 per barrel while U.S. crude futures shed 0.48% to $80.13 per barrel.

“The rise in energy prices is fuelling concerns that the transitory lift in inflation seen in the wake of the pandemic may prove to be longer lasting,” Tapas Strickland, an economist at National Australia Bank, wrote in a Tuesday note.

The recent jump in oil prices comes as a rebound in global demand contributed to power shortages in major economies such as China. Last week, the Organization of the Petroleum Exporting Countries and its allies — a group collectively referred to as OPEC+ — also opted against a supply boost, further fueling the oil price rally.

Overnight stateside, the Dow Jones Industrial Average fell 250.19 points to 34,496.06 while the S&P 500 slipped 0.69% to 4,361.19. The Nasdaq Composite shed 0.64% to 14,486.20.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 94.237 after a recent bounce from below 94.2.

The Japanese yen traded at 113.08 per dollar after yesterday’s weakening from below 112.8 against the greenback. The Australian dollar changed hands at $0.7344, above levels around $0.73 seen earlier in the trading week.