South Korea’s Kospi jumps 4% as Asian stocks rise after bond rally
MSCI’s Asia Pacific index rises 1%, snapping a two-day losing streak
Asian stocks and bonds experienced a rally on Wednesday, following the US plan to buy back longer-dated Treasuries in an effort to curb borrowing costs. This move bolstered investor sentiment, as the US dollar steadied after sliding to a three-month low. MSCI's Asia Pacific index rose by 1%, marking a turnaround after two days of losses, primarily propelled by a 4% surge in South Korea's Kospi index.
Other notable market movements included the S&P 500 futures increasing by 0.2%, the Hang Seng futures climbing by 0.9%, Japan's Nikkei 225 futures rising by 1.1%, and Australia's S&P/ASX 200 index up by 0.3%. Similarly, key Japanese and Australian benchmark indices also saw gains. SK Hynix, a prominent South Korean memory chip maker, saw its shares surge by over 8% after announcing a stock buyback plan.
Bond markets in Japan, Australia, and New Zealand followed the same upward trend, buoyed by the earlier gains in US Treasuries. The 30-year US bond yield remained stable at 5.19%, having fallen marginally by nine basis points the previous day, while the 10-year yield held steady at 4.64%, maintaining a six-basis-point decline from the earlier session.
This rally in global bonds was attributed to the Treasury's announcement of plans to boost buybacks of securities with maturities ranging from 10 to 30 years, aimed at bringing down yields that had reached multi-decade highs. Investors had been concerned about inflation risks and the rise in government debt levels, further exacerbated by tensions in the Middle East.
The US dollar remained relatively stable, showing minimal change in Asia after slipping to its lowest level since May due to the decline in Treasury yields. Gold prices dipped by 0.2% despite reaching their highest level since early June. Bitcoin surged to around US$70,000 following US President Donald Trump's endorsement of a crypto bill during a White House meeting with industry representatives.
Sentiment improved for US equity-index futures following a modest gain in the S&P 500 Index on Tuesday, even as chipmakers faced declines. Contracts for the Nasdaq 100 Index increased by 0.4%. Meanwhile, Brent crude oil prices climbed for the fifth consecutive day, reaching approximately US$91.85 per barrel, following President Trump's announcement of an "unprecedented economic warfare operation" against Iran, expressing frustration over Iran's failure to reach a deal with the US.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
