Asian shares_ US futures slide over Ukraine issue

Asian shares and US futures tumbled on Tuesday after a tumultuous Wall Street session_ with investors nervous about the situation in Ukraine and eyeing the US Federal Reserve amid worries about a move to tighter monetary policy globally.

NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets_ in what Russia denounced as Western "hysteria" in response to its build-up of troops on the Ukraine border. read more

MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.2%_ falling to its lowest in a month_ and Japan's Nikkei skidded 2% to its lowest level since August.

There were sharp declines around the region. Hong Kong lost 1.64% and Korea's KOSPI fell 1.67%. The Australian benchmark tumbled 2.73% to hit an eight-month low_ hurt also by a high inflation print Tuesday morning that stoked fears of approaching rate hikes Down Under.

Asian markets were being dragged lower by concerns about faster US rate hikes_ mounting tensions over Ukraine_ rising inflation and higher oil prices_ said Carlos Casanova_ senior economist at UBP.

"But on the upside_ valuations are becoming more attractive and earnings growth are still robust for some sectors. So I think we will see a tug of war in the market for this week_" he said.

US futures also fell in Asian hours_ Nasdaq futures shed 1.2% and S&P500 futures lost 0.95%_ after US stock markets had recovered strongly late in the session to close higher_ recouping steep losses made early in the day_ as bargain-seeking investors snapped up shares.

The Dow Jones Industrial Average finished up 0.29%_ the S&P 500 gained 0.28% and the Nasdaq Composite added 0.63%.

Keeping traders on their toes_ the Federal Reserve will begin its two-day meeting later on Tuesday_ with investors starting to speculate that there is a small possibility that they will announce a surprise rate hike.

Investors are also anxiously looking out for any hints about the timing and pace of rate hikes expected later this year. Money markets are priced for a first rate hike in March_ with three more quarter-point increases by year-end.

However_ US benchmark Treasuries were sitting out some of the speculation. Yields on benchmark 10 year notes were at 1.76%_ steady on the day_ having finished a choppy day of trading Monday near where they started.

Singapore's central bank also tightened monetary policy on Tuesday in an out-of-cycle move.

Market nerves sent the dollar higher against most peers. The dollar index was at 95.922_ hovering near a two-week high_ having gained 0.29% overnight.

The Aussie dollar gained briefly after the high inflation print_ but failed to hold on to its gains and the risk friendly currency was still hovering near the one-month low hit the day before.

Oil prices were also elevated_ further worrying stock investors. US crude rose 0.5% to $83.73 per barrel and Brent crude was at $86.83_ up 0.65%.

Gold held on to its recent gains as investors sought safety. The spot price was at $1_841 an ounce_ flat on the day but near last week's two-month high of $1_847.7.