Nikkei 225 lost 1.3% to 38,054.13, Hang Seng shed 1.4% to 18,217.83, Shanghai Composite index shed 0.6% to 3,091.68, S&P/ASX 200 slid 0.5% to 7,628.20, Kospi dipped 1.6% to 2,635.44, Taiex shed 1.4% and Sensex was down 0.5%
Shares retreated Thursday in Asia after U.S. stocks dropped under the weight of higher yields in the bond market, with the Dow Jones Industrial Average dropping more than 400 points.
Tokyo’s Nikkei 225 benchmark lost 1.3% to 38,054.13 and the Hang Seng in Hong Kong shed 1.4% to 18,217.83.
The Shanghai Composite index shed early gains, declining 0.6% to 3,091.68.
Australia’s S&P/ASX 200 slid 0.5% to 7,628.20, while the Kospi in Seoul dipped 1.6% to 2,635.44.
Taiwan’s Taiex shed 1.4% and India’s Sensex was down 0.5%.
Hotter and stickier than expected global inflation seems to be taking the air out of asset markets, Mizuho Bank said in a commentary. In other words, “Goldilocks” coming undone. And concerns about adverse demand impact from higher rates seeping through, it added.
On Wednesday, the S&P 500 slipped 0.7%, to 5,266.95, trimming its gain for May, which had been on track to be its best month since November. Four out of every five stocks in the index declined.
The Dow industrials shed 1.1% to 38,441.54 and the Nasdaq composite slid 0.6% to 16,920.58 after setting its latest all-time high.
American Airlines Group led a slump for airline stocks after cutting its forecast for profit and other financial targets for the spring. The carrier said fuel costs may be a bit lower than previously thought, but an important revenue trend would likely be as well. Shares dropped 13.5%.
ConocoPhillips dropped 3.1% after it said it would buy Marathon Oil in an all-stock deal valuing the company at $22.5 billion, including $5.4 billion of net debt. It is the latest big deal for an industry that has seen several buyout announcements recently. Marathon Oil added 8.4%.
Advance Auto Parts dipped 11% after its results and revenue for the latest quarter came up just short of analysts’ expectations.
Another jump in longer-term Treasury yields also weighed on the stock market, and the 10-year yield advanced to 4.61% from 4.54% late Tuesday following an auction of $44 billion in seven-year Treasurys.
The 10-year yield is still down for the month, but it’s been rising since dropping below 4.40% in the middle of May. Higher Treasury yields hurt prices for all kinds of investments.
This month’s swings in yields have also come as traders recalibrate their expectations for when the Fed could begin cutting its main interest rate, which is at its highest level in over two decades.
With inflation stubbornly higher, traders have had to delay their forecasts for rate cuts several times this year.
