Asian shares fall to near 2-year lows

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Asian shares fall to near 2-year lows

Asian shares fell to their lowest in nearly two years on Tuesday as investors shed riskier assets on worries about higher interest rates and their impact on economic growth, while the dollar held near 20 year highs.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.8%, falling for a seventh straight session and extending declines to 17% so far this year.

Share indexes were a sea of red across Asia. The Nikkei lost 0.9%, Australian shares lost 2.5% and Korean stocks lost 2%.

S&P 500 stock futures and Dow Jones futures both fell 0.5% and Nasdaq futures fell 0.6%.

The idea of a gentle tightening cycle has evaporated, ANZ analysts said in a report.

The risk to inflation and therefore interest rates lies to the upside, as the labor force participation rate stays low and the Chinese exports slow, and the Fed cannot control the supply side of the economy in the short-run, according to ANZ.

The central banks in the United States, Britain and Australia raised interest rates last week, and investors were girded for tighter tightening as policymakers fight inflation.

Overnight, U.S. stocks extended Friday's bruising sell-off as investors tried to protect themselves against the prospect of a weak economy.

On Tuesday, oil prices fell as demand concerns in China increased as the top oil importer, coronaviruses lockdowns in the top oil producer, caused by the coronaviruses lockdown in the country. After falling 5.7% on Monday, the price of crude fell 0.5% to $105.4 a barrel.