Asian stocks slump as bond yields surge
Market jitters gripped Asian stocks on Wednesday as a sharp rise in US bond yields unnerved investors ahead of key inflation data that could influence the Federal Reserve’s pace of policy easing.
Hong Kong’s Hang Seng index fell more than one per cent, with a subindex of mainland Chinese property stocks slumping 2.5 per cent. Chinese blue chips were also slightly lower.
Japan’s Nikkei and South Korea’s Kospi sagged 1.8 per cent and 2.2 per cent, respectively, while Australia’s stock benchmark dropped one per cent under the weight of commodity shares.
US stock futures declined slightly, following a modest drop overnight. European markets were also expected to open lower.
Concerns about the outlook for China, a major consumer, weighed on commodities. The country is expected to bear the brunt of potential trade tariffs. Stimulus announcements from Beijing have so far failed to spark significant optimism about an economic revival.
The US dollar edged up to a high not seen since July 30th against the yen, putting the currency pair on the cusp of a level that could trigger intervention by Japanese authorities. The People’s Bank of China also intervened to support the yuan, which had fallen to a three-month low against the dollar.
Crude oil prices continued to hover near their lowest levels this month after OPEC revised down its forecast for global oil demand growth, highlighting weakness in China and other regions.
Gold attempted to recover, rising slightly after slumping to a nearly two-month low in the previous session, pressured by dollar strength.
Attribution: Reuters
Subediting: M. S. Salama
