By Alun John

HONG KONG (Reuters] – Asian stocks fell Wednesday following an overnight recovery in U.S. stock and European shares. This was despite investors ignoring concerns over a U.S. debt default. Meanwhile, oil slowed to near multi-year highs.

Two days ago, the OPEC+ producer group remained true to its plan for an increase in production rather than cutting it. This is why oil prices have risen.

It rose to its highest since 2014, but lost gains. The last drop of 0.09% was $78.87 per barrel. The previous session saw a three year high of $82.49 per barrel, which was 0.08% lower.

“OPEC’s outlook suggests further reductions in global oil stockpiles. That’s a problem given that oil inventories are already low,” wrote analysts at CBA in a note.

Rising prices could threaten the global economic recovery as global oil demand growth was picking up as economies re‑opened on the back of rising vaccination rates, they added.

MSCI’s Asia-Pacific broadest index, which is not Japan-based, fell 0.6% in equity markets. This reversed early gains and lost 0.78%.

According to traders, markets feel jittery because of concerns over China’s property market and rising interest rates.

The falls were in Hong Kong of 1% and Korea 0.9% respectively. Australia was down 0.45%.

U.S. stock futures lost 0.44%

Chinese markets closed due to public holidays. China Evergrande shares were also suspended because they had stopped trading Monday in anticipation of an announcement regarding a substantial transaction.

After fresh credit ratings downgrades, Evergrande’s fate was uncertain for Chinese property developers.

The central bank of New Zealand raised interest rates 25 basis points, but there was little reaction as it was widely anticipated that the change to raise the cash rate by 0.50% would be.

This announcement led to the New Zealand dollar rising by about 0.1% after which it fell by 0.34%.

Overnight, the US dollar rose by 0.92%. It gained 1.05% over the overnight and climbed 1.25% in spite of fears about default. ()

On Wednesday, the Senate will vote to approve a Democratic-backed measure that suspends the U.S. debt limit. A key lawmaker stated Tuesday that this is because partisan brinkmanship within Congress could result in an economically damaging federal credit default.

However, these fears did not stop the dollar from regaining its 12-month highs. The benchmark yields of treasury were also at their highest since mid-June.

The dollar remained close to the highs of the year in Asian trading against a basket its peers. However, the euro was at its lowest level for 14 months last week.

A positive sentiment in equity markets is reflected by the 0.5% drop of the safe-haven Japanese yen.

Benchmark yield rose to 1.5466%. This is close to the four-month peak of 1.5670% reached in September.

The non-interest bearing asset suffered higher yields and fell 0.15% from $1757.3 to $1757.3 per ounce