SYDNEY - Asian share markets were mostly in the red on Wednesday as worries about waning global growth lifted safe-haven bonds, while shoving oil prices to their lowest in more than two years.
Extending a three-month-long decline, Brent oil LCOc1 sank $1.18 to $90.93 a barrel while US crude CLc1 tumbled $1.07 to $87.78. The protracted slide should be a windfall for consumer spending power, but is also a powerful force for disinflation in much of the developed world.
That has been a boon for sovereign bonds as investors wager the outlook for slowing inflation could put off the day when US interest rates might rise.
Minutes of the Federal Reserve's last policy meeting are due later in the session and markets will be acutely sensitive to how the debate between hawks and doves on the committee was playing out.
In Asia, Japan's Topix .TOPX shed 1.1 per cent while the Nikkei .N225 dropped 1.0 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1 per cent, while Australia's main index lost 0.9 per cent.
China's markets bucked the trend as they returned from a week-long break, with Shanghai .SSEC up 0.5 per cent, though Hong Kong .HSI shed 0.7 per cent.
A private survey of China's services sector showed growth eased a touch in September, but that only served to reinforce expectations of further stimulus measures by Beijing.
Stimulus is also high on the agenda in Europe after German industrial output suffered the biggest decline since the height of the financial crisis, piling pressure on the European Central Bank to be more urgent in its actions. [TOP/CEN]
The IMF on Tuesday shaved its global growth forecast to 3.3 per cent for this year, from 3.4 per cent, warning of weakness in the euro zone, Japan and big emerging markets such as Brazil.
"Weak numbers like the German production report fuel concern that ECB stimulus will be inadequate given the gloomier news," said Westpac analyst James Shugg.
"With the IMF waving its knife at its global growth forecasts, US markets couldn't avoid the downdraft either."
The Dow .DJI fell 1.6 per cent, while the S&P 500 .SPX lost 1.51 per cent and the Nasdaq .IXIC 1.56 per cent. The pan-European FTSEurofirst 300 .FTEU3 also shed 1.5 per cent.