Asian markets were broadly down on Wednesday, tracking the end of a record streak on Wall Street as concerns lingered over the economic recovery and China's widening crackdown on tech firms.
Oil prices briefly spiked Tuesday before falling after the latest talks by OPEC+ crude producers fell apart, ending negotiations on a proposal to boost crude supply.
US oil futures approached a seven-year peak after the talks were called off but investors quickly shifted course, selling both Brent and West Texas Intermediate futures contracts over concerns about the possible disintegration of efforts to rein in supply.
The trend in oil prices has also fanned fears about inflation, with investors worried that an overheating economy may force central banks such as the US Federal Reserve to hike interest rates earlier than thought.
"There are still concerns about what happens with the Fed tapering and there's lack of traction on the fiscal stimulus side," Keith Lerner, chief market strategist at Truist Advisory Services, told Bloomberg News.
"Those uncertainties are just injecting some volatility and then you throw in concerns about peak economic growth. That just feeds into the concerns about -- is the best growth behind us?"
Wall Street was down Tuesday, with the Dow and the S&P 500 retreating from records and Treasury yields dropping after the US Independence Day holiday following the release of a worse-than-expected economic indicator for the US service sector in June.
Those losses carried over to Tokyo on Wednesday, where the benchmark Nikkei 225 closed lower as dimming views of the US economy weighed on the market and cautious investors awaited fresh market moving events.
Hong Kong also fell in trade Wednesday, with concerns looming about China's crackdown on tech giants following the removal of the ride-hailing firm Didi Chuxing from app stores.
Didi shares plunged nearly 20 percent on Wall Street Tuesday after Chinese authorities raised national security concerns over the popular app, hinting at an expansion of oversight over tech firms after years of light-touch regulation.
"You could say that the last decade has been regulatory-free for the Chinese companies," said Winston Ma, an adjunct professor at New York University. "Now they are entering into a new era."
Shares in Chinese electric car maker XPeng -- already listed on the Nasdaq -- debuted in Hong Kong Wednesday under the cloud of that crackdown, following a $1.8 billion IPO.
Seoul was also down, while Sydney rose despite concerns over coronavirus outbreaks fuelled by the Delta variant and an extended lockdown in Australia's biggest city.
Shanghai had risen by closing. London, Paris and Frankfurt all rose on opening.
Traders are also focused on the release later in the day Wednesday of the minutes from the Fed's June meeting -- known as the FOMC -- hoping to find clues about the central bank's policy plans as the US economy -- the world's biggest -- recovers rapidly.
The latest OPEC+ talks on boosting crude supply have fallen apart Photo: AFP / Yuri CORTEZ
"Recent weeks have seen the global recovery motor along as expected, supported by the vaccine rollouts and a further easing of restrictions," a report by Deutsche Bank AG Chief Economist David Folkerts-Landau and strategists including Marion Laboure found.
But since May "the balance of risks is slightly more negative given the continued global reach of the Delta variant and the reaction to the FOMC," it added.
West Texas Intermediate: UP 0.1 percent at $74.00 per barrel
Brent North Sea crude: UP 0.1 percent at $75.09 per barrel
Tokyo - Nikkei 225: DOWN 0.96 percent at 28,366.95 (close)
Hong Kong - Hang Seng Index: DOWN 0.9 percent at 27,832.42
Shanghai - Composite: UP 0.7 percent at 3553.72 (close)
Euro/dollar: DOWN at 1.1817 from 1.1822
Pound/dollar: DOWN at 1.3792 from $1.3796
Euro/pound: DOWN at 85.67 pence from 85.69 pence
Dollar/yen: UP at 110.72 yen from 110.51 yen
New York - Dow: DOWN 0.6 percent at 34,577.37 (close)
London - FTSE 100: UP 0.5 percent at 7,138.47
Frankfurt - DAX 30: UP 0.6 percent at 15,614.48
Paris - CAC 40: UP 0.4 percent at 6,536.15
