After reaching two-month highs, Asian stocks fell overnight and emerging-market currencies weakened as concerns about the state of the global economy restrained demand for riskier assets. Oil prices moved slightly higher on news of a drop in U.S. production and then retreated.
The MSCI Asia Pacific Index lost 0.7 percent with energy stocks sinking more than 1.5 percent. Japan’s Topix dropped for a third day, led by shipping stocks after Mitsubishi UFJ Morgan Stanley lowered price targets for the sector’s three biggest companies. Hong Kong's Hang Seng slipped 0.4 percent and the Shanghai Composite Index slid 2.4 percent.
However, European shares may come in better with financial spreadbetters expecting Britain's FTSE 100 FTSE, Germany's DAX and France's CAC to each open about 0.1 percent higher.
Oil Retreats
The turnaround in oil prices ended six days of gains for benchmark Brent crude futures, following industry data showing U.S. stockpiles reached record highs again last week. Brent LCOc1 settled down 2.9 percent at $39.65 a barrel on Tuesday after hitting a 2016 high of $41.48 earlier in the session, reversing earlier losses to rise 0.4 percent at $39.81 on Wednesday. Prices are up 47 percent from a 12-year low of $27.10 struck on Jan. 20.
According to Tatsushi Maeno, managing director of PineBridge Investments, "Although oil prices have risen sharply from the trough, many investors are not yet convinced if things have improved that much and I suspect they judged now is a good time to sell."
U.S. stocks also ended near the day's lows on Tuesday as energy shares tumbled after hitting a two-month high on Friday.
S&P 500 Index lost 1.12 percent to 1,979.26 while the tech-heavy Nasdaq dropped 1.26 percent to 4,648.83.