Most Asian markets opened lower on Tuesday, after a weak lead from Wall Street and with eyes on key US inflation data later in the day.

Tokyo was down more than one per cent, while Hong Kong dipped slightly into the red. There were small gains in Taipei and Jakarta.

This followed a weak lead on Monday from Wall Street and Europe, with sentiment souring on flat UK economic growth and expectations for another strong US inflation report, which will likely bring aggressive US interest rate hikes.

The US S&P 500 fell 1.7 per cent in the first trading day of the holiday-shortened week.

The government is set to release the US consumer price index for March on Tuesday, after inflation rose 7.9 per cent over the 12 months to February, the biggest increase in 40 years.

Calling it the “Putin price hike” in reference to the economic ramifications of Russia’s invasion of Ukraine, White House press secretary Jen Psaki told reporters: “We expect March headline inflation to be extraordinarily elevated.” Economists are expecting annual US inflation to spike to nearly 8.5 per cent, which would be the highest since late 1981.

“What we’re faced with this year is stagflation,” Kathryn Rooney Vera, head of global macro research at Bulltick LLC, told Bloomberg Television. “It’s a very complicated environment that the Fed has found itself in” and the market is pricing in potentially 50 basis points of hikes at each of the next two policy meetings, she added.

“Risk assets are starting to respond to the relentless rise in yields with US equities falling sharply overnight as the US 10-year yield hit 2.79 per cent, its highest in three years,” said Tapas Strickland of National Australia Bank in a note.

All those concerns were weighing on the Tokyo market, Okasan Online Securities said in a note.

“Investors will then likely refrain from making major moves ahead of the release of the March US consumer prices data later in the day. The market will likely lose a sense of clear direction” until the data’s release, the brokerage said.

“Investors will then likely refrain from making major moves ahead of the release of the March US consumer prices data later in the day. The market will likely lose a sense of clear direction” until the data’s release- Okasan Online Securities

Hong Kong’s modest gains were fuelled by tech shares after China’s approval of the first batch of new video game licences since July. That step may ease some of the worst concerns about Beijing’s gaming-sector curbs.

Oil steadied, with Brent crude back just over $100 a barrel, after a tumble that erased most of the commodity’s gains sparked by Russia’s war in Ukraine. China’s coronavirus outbreaks and mobility curbs are imperilling demand.