BANGKOK – Stocks fell on Wednesday in Asia, with investors pondering the possibility that inflation will prompt central banks to adjust their ultra-low interest rate policies.
Hong Kong Hang Seng HSI,
led the decline, losing 2%. Nikkei 225 NIK from Tokyo,
fell 0.9% and in Seoul the Kospi 180721,
fell by 0.9%. S & P / ASX 200 XJO from Australia,
lost 1%, while the Shanghai Composite SHCOMP index,
gave up 1.5%. Shares won in Singapore STI,
but it slipped on Taiwan Y9999,
and Indonesia JAKIDX,
Investors remain increasingly focused on a sharp rise in bond yields and how it affects stock valuations.
The large amount of stimulus being injected into economies has been a factor in raising bond yields, making some investors hesitate, while it revives inflation concerns that have been almost non-existent for more than a decade.
Yield on the 10-year Treasury note, which rose recently, was stable at 1.34% on Wednesday.
When bond yields rise, stock prices tend to be negatively impacted, as investors direct an increasing portion of their money to the more stable income stream that bonds provide.
Federal Reserve Chairman Jay Powell told Congress on Tuesday that the Fed saw no need to change its policy of maintaining ultra-low interest rates, noting that the economic recovery “remains uneven and far from complete”.
The message seemed muted in Asia.
“Rising borrowing costs remain the dominant issue, although Fed Powell’s peaceful comments helped to contain the fall in US stocks on Tuesday,” said IG’s Jingyi Pan in a comment.
However, “despite reassuring comments about the lower rates by US Federal Reserve Chairman Jerome Powell, Asian markets continued to worry about rising bond yields,” said Pan.
A late afternoon shopping boom on Wall Street on Tuesday helped to reverse most technology-focused sales, pushing the S&P 500 SPX,
for his first win after a five-day losing streak.
The benchmark index registered a gain of 0.1%, to 3,881.37. The DJIA of the Dow Jones Industrial Average,
also rose 0.1% to 31,537.35. The Nasdaq COMP,
lost 0.5% to 13,465.20. The indices had been at their peak for less than two weeks.
In other negotiations, the US reference crude oil CLJ21,
lost 52 cents to $ 61.15 a barrel in e-commerce on the New York Mercantile Exchange. He lost 3 cents on Tuesday to $ 61.67 a barrel. Brent crude BRNJ21,
the international standard, lost 39 cents to $ 64.09 a barrel.
The US dollar USDJPY,
rose to 105.44 yen from 105.24 yen on Tuesday.