Asian markets take their cue from volatile Wall Street session

A man wearing a protective mask walks past an electronic board displaying graphs of the Nikkei index outside a brokerage in Tokyo amid the coronaviruses disease COVID 19 outbreak.

HONG KONG Reuters- Asian shares fell in early trade on Tuesday, as investors took their cue from a volatile Wall Street session overnight, while oil prices went up after last week's rout.

Oil rose as investors weighed concerns over an economic slowdown and the loss of Russian supply due to sanctions related to the conflict in Ukraine.

Political unrest could affect supply from a couple of second-tier producers, Libya and Ecuador. There is the proposed price cap on Russian oil proposed by the G 7. The broadest index of Asia-Pacific shares outside Japan was down 0.7% early in the Asian trading day. The index is down 3.8% this month. The US stock futures, the S&P 500 e-minis, were up 0.27%.

Australian shares increased by 0.25%, while Japan's stock index rose by 0.5%.

China's blue-chip CSI 300 index was 0.4% lower in early trade. Hong Kong's Hang Seng index was down 0.36%.

On Monday, the U.S. stocks ended up slightly lower with little catalysts to move investor sentiment as they approach the half-way point of a year in which the equity markets have been slammed by inflation worries and tighter Fed policy.

The major U.S stock indexes lost ground after it went up earlier in the session, with weakness in interest rate sensitive megacaps such as Amazon.com Inc, Microsoft Corp and Alphabet Inc providing the heaviest drag.

The Dow Jones Industrial Average fell 0.2%, the S&P 500 lost 0.30% and the Nasdaq Composite dropped 0.72%.

Oil prices went up as the Group of Seven nations promised to tighten the pressure on Russia's finances with new sanctions that include a plan to cap Russian oil prices.

U.S. crude went up 0.99% to $110.65 a barrel. Brent crude rose to $116.22 per barrel.

Treasury yields went up on Monday after capital and durable goods orders data and pending home sales surprised the upside from the previous month.

The yield on the benchmark 10 year Treasury notes reached 3.1847% on Tuesday, compared with its U.S. close of 3.194% on Monday. The two-year yield, which has risen with traders' expectation of higher Fed fund rates, was at 3.0974% compared to a U.S. close of 3.123%.

The U.S. dollar fell compared to major rivals as investors weighed expectations on inflation and interest rate hikes. The dollar index, which tracks the dollar against a basket of currencies of other major trading partners, was down to 103.91.