Asian stocks reversed earlier gains on Tuesday, dragged down by declines in Chinese markets, which were jolted by a new round of sanctions, after ebbing inflation fears had helped shore up broader sentiment in the region.
Investors now await a closely watched congressional appearance by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen.
The negative sentiment appears set to weigh on European stocks with as EUROSTOXX 50 futures easing 0.42 and FTSE futures 0.61.
SP 500 futures fell 0.28.
MSCIs broadest index of AsiaPacific shares outside Japan dropped 0.76, hurt by a 1.42 fall in Chinese blue chips.
The United States and others, including the European Union, sanctioned Chinese officials on Monday over human rights abuses in Xinjiang, and Beijing hit back with punitive measures against European lawmakers, diplomats, institutes and families.
The fall could be due to the sanctions, said Iris Pang, chief economist for greater China at ING Wholesale Banking. More pressure from international politics is going to affect asset markets.
Jin Jing, an analyst with China Fortune Securities, said sanctions hurt risk appetite, in particular for foreign investors, who sold shares via the Stock Connect.
Persistent worries of policy tightening at home also continued to weigh on highflying sectors and stocks with lofty valuations as investors turned cautious.
Hong Kongs Hang Seng Index also fell 1.62, with traders attention drawn by a tepid market debut…