* Asian stock markets decline to multi-month lows
* Benchmark index slips for third straight session
* Rising energy prices rattle markets
Asian shares tracked a broad sell-off on Wall Street to weaken for a third straight session on Tuesday, as investors feared oil prices hitting multi-year highs would add to inflationary pressures caused by supply chain disruptions.
US and European stock futures edged up, with S&P 500 e-minis rising 0.01%, the pan-region Euro Stoxx 50 futures gaining 0.2 and FTSE futures gaining 0.4%.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped as much as 1.3%, declining for a third consecutive session. Japan stocks were down 2.5%, South Korea gave up 2% and Australia shed 0.4%.
"Investors are clearly worried about inflation due to supply chain disruptions and the rally in energy prices," said Vasu Menon, executive director of investment strategy at OCBC Bank.
The drop in markets took MSCI's main benchmark to 619.77, the lowest since November 2020 but it pared losses to be down 0.6% in late Asia trade. The index has shed more than 5% this year, with Hong Kong and Japanese markets among the big losers.
"We have seen tech stocks outperform value stocks, so if inflation remains a worry, then tech stocks tend to get hit," Menon said.
Oil prices reached three-year peak on Monday after OPEC+ confirmed it would stick to its current output policy as demand for petroleum products rebounds, despite pressure from some countries for a bigger boost to production.
Underscoring the rise in commodity prices, the Refinitiv/CoreCommodity CRB index rose to 233.08 on Monday, the highest in more than six years.
US oil was steady at $77.68 a barrel, a day after hitting its highest since 2014. Brent crude stood at $81.5 after rising to a three-year top.
"OPEC+ may inadvertently cause oil prices to surge even higher, adding to an energy crisis that primarily reflects very tight gas and coal markets," said Commonwealth Bank of Australia's commodities analyst Vivek Dhar.
"That potentially threatens the global economic recovery, just as global oil demand growth is picking up as economies re-open on the back of rising vaccination rates," Dhar said in a note.
Market focus in Asia was on whether embattled property developer China Evergrande would offer any respite to investors looking for signs of asset disposals.
Shares in the the world's largest indebted developer were halted for trading on Monday but more Chinese property developers grappled with ratings downgrades on worries about their ability to repay debt.
The Dow Jones Industrial Average fell 0.94% to 34,002.92, the S&P 500 lost 1.30% to 4,300.46 and the Nasdaq Composite dropped 2.14% to 14,255.49 as investors dumped Big Tech stocks in the face of rising Treasury yields.
US Treasury yields rose on investor caution about the need to raise the government's debt ceiling as the United States faces the risk of a historic default in two weeks.
The US dollar traded near a one-year high versus major peers ahead of key US payrolls data due at the end of the week. The jobs data might offer clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate increases.
The dollar index, which tracks the greenback versus a basket of six currencies, edged up 0.20% to 94.02.
The euro fell 0.25% to $1.1592, while the yen rose 0.29% to $111.18
Gold prices eased to $1,757 per ounce, after rising on Monday to the highest since Sept. 23.