Asia-Pacific markets set to trade lower following overnight losses on Wall Street

SINGAPORE — Asia-Pacific shares were set to trade cautiously on Thursday, following overnight losses on Wall Street.

Futures pointed to a lower open in Japan, where the benchmark Nikkei 225 lost 0.4% in the previous session.

In Australia, the ASX 200 fell 0.3% in early trade as the energy sector lost 1.66% and the heavily-weighted financials subindex slipped 0.53%.

The country's so-called Big Four banks struggled for gains: Shares of ANZ were down 0.86%, Commonwealth Bank fell 0.87%, Westpac lost 0.58% and the National Australia Bank declined 0.38%.

"Equities were soft overnight on inflation concerns, as UK inflation came in stronger than expected and supply constraints weighed on housing starts in the US," analysts at ANZ Research said in a morning note.

The U.K.'s Consumer Price Index rose by 4.2% in the 12 months to October, up from 3.1% in September and beating economists' expectations of 3.9%.

Wednesday's data is expected to add pressure on the Bank of England to act on interest rates at its December meeting. The central bank held rates steady in November, defying many investors' expectations that it would be the first major central bank to hike rates following the coronavirus pandemic.

Oil prices declined in the previous session amid growing concerns about oversupply and a recovery in demand.

Brent crude futures fell 2.6% to $80.28 a barrel while U.S. West Texas Intermediate (WTI) crude futures settled 3% lower at $78.36.

"The release of the weekly (U.S. Energy Information Administration) report showing a large fall in inventories did little to stop the selling," ANZ Research analysts wrote Thursday.

"This may be due to the bearish tone that both the IEA and OPEC set earlier this week in their monthly oil market reports. Both expect the market to move into surplus in the not too distant future," they added.

President Joe Biden's administration has also asked some of the world's largest oil-consuming countries to consider releasing some of their crude reserves to coordinate efforts to push prices lower and help with economic recovery, according to media reports.

Elsewhere, in the currency market, the U.S. dollar last traded at 95.828 against a basket of its peers — the dollar index climbed from levels below 95.200 in the previous week.

The Japanese yen changed hands at 114.18 per dollar while the Australian dollar traded near flat at $0.7267.

— CNBC's Matt Clinch contributed to this report.