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SYDNEY (Reuters) - Asian share markets were on the ropes for a second straight session early Tuesday as investors anxiously waited to see if Beijing can head off the latest selling stampede in Chinese stocks.
An unnerving combination of global economic concerns and escalating tensions in the Middle East also crunched commodity prices while bolstering safe-haven sovereign bonds.
Nikkei futures JNc1 were down another 0.9 percent, after the cash index .N225 fell 3.1 percent on Monday in its biggest single-day slide since Sept. 29.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS eased 0.2 percent, while Australian stocks lost 1.1 percent.
All eyes were on China after stocks tanked on the first trading day of the year, triggering a "circuit-breaker" that suspended equities trade nationwide for the first time.
The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen sank 7.0 percent before trading was suspended, its worst single-day performance since August last year when in the throes of another market rout.
Indeed, that August episode likely planted the seeds of the latest slide since authorities reacted back then by imposing a lock-up on share sales by major institutional investors.
That lock-up is slated to end in the next few days, allowing the sale of perhaps 1.24 trillion worth of shares according to some estimates. Some are now wagering Beijing will extend the lock-up period given the severity of Monday's dive.
The selling spread through Europe where Germany's DAX .GDAX shed 4 percent and the Euro STOXX 50 index .STOXX50E fell 3 percent.
Wall Street followed at first, but did recoup some of its losses going into the close. The Dow .DJI closed down 1.58 percent, while the S&P 500 .SPX fell 1.53 percent and the Nasdaq .IXIC 2.08 percent.
Some central banks seemed to share the general sense of alarm. Sweden on Monday gave its chief the formal power to act immediately to weaken the crown and help push up inflation, a radical step among developed world institutions.
Under Governor Stefan Ingves, the Riksbank has already slashed rates to a record low of -0.35 percent.
The European Central Bank was under pressure to do yet more after German inflation proved surprisingly weak in December, pushing down bond yields and slugging the euro.
The common currency was stuck at $1.0828 EUR= on Tuesday, having touched a one-month low around $10.780. Against a basket of major currencies, the dollar .DXY was last up 0.21 percent at 98.827.
It had less luck against the Japanese yen which tends to benefit during times of market stress as Japan is the world's largest creditor nation. The dollar was buying 119.31 yen JPY= after being as low as 118.68.
The run from risk boosted U.S. Treasuries where yields on 10-year notes US10YT=RR dropped 3 basis points to 2.24 percent.
Worries about the global economy weighed on commodity prices with copper shedding more than 2 percent on Monday.
Oil was near flat having been up as much as 4 percent at one stage amid a brewing dispute between Saudi Arabia and Iran. Early Tuesday,
Brent LCOc1 for February delivery was quoted 5 cents firmer at $37.33 a barrel, while U.S. crude added 13 cents to $36.89.
Reporting by Wayne Cole; Editing by Eric Meijer