Asian shares fall as rising energy costs fan inflation fears

Shares retreated in Asia on Tuesday as surging prices of oil, coal and other energy added to concerns over inflation.

Benchmarks declined in Tokyo, Hong Kong and Shanghai. Oil prices edged lower after U.S. benchmark crude oil closed above $80 per barrel on Monday. It traded briefly above $81 per barrel on Monday for the first time in seven years.

Costs of oil, coal and natural gas have been climbing, adding to price pressures that might lead the Federal Reserve and other central banks to pull back more quickly on their support for markets.

Tokyo's Nikkei 225 index lost 1% to 28,216.15 and the Hang Seng in Hong Kong also fell 1%, to 25,066.05. The Shanghai Composite index shed 1% to 3,554.38 and the S&P/ASX 200 slipped 0.4% to 7,272.90.

Shares also fell in India and Taiwan, but rose in Jakarta and Bangkok.

Energy demand has bounced back faster than output as economies recover from the pandemic, driving prices higher. Other factors, including a shortage of truck drivers, shipping disruptions, flooding of coal mines in China and drought that has dented hydropower generation are also pushing prices higher.

“Energy crisis uncertainty will likely keep crude prices heading higher until the oil market seems likely it is heading towards balance. The natural gas shortage is not going away anytime soon and that will keep providing additional demand for crude," Edward Moya of Oanda said in a commentary.

U.S. benchmark crude oil slipped 13 cents to $80.39 per barrel in electronic trading on the New York Mercantile Exchange. It gained 1.5% to $80.52 per barrel on Monday.

Brent crude, the international pricing standard, shed 6 cents to $83.59 per barrel.

On Wall Street, stocks closed broadly lower Monday, with the S&P 500 down 0.7% at 4,361.19. The Dow Jones Industrial...