Asia shares bound for weekly fall as bond yields, oil stay high
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.5%
Asia's major stock indices are set to face their weekly decline this Friday (Aug 21) due to lingering concerns in global bond markets, and a diplomatic impasse in the Gulf region driving up oil prices to monthly highs. US Treasury yields are on the rise after a surprise intervention by Treasury Secretary Scott Bessent, which provided only brief respite from selling.
Bessent even suggested potential fiscal consolidation, but analysts doubt his ability to significantly reduce the budget deficit of over 6% of GDP. The debt level and large deficits have raised questions about the Treasury's credibility, and higher yields increase debt costs globally, impacting tech giants' borrowing for AI investments and affecting stock valuations.
The Nikkei dropped 0.8%, marking a 4.4% week loss, while South Korea and Taiwan ticked higher but remain down for the week. In Europe, Euro Stoxx 50 and DAX futures slightly declined, while FTSE futures slipped 0.1%. Wall Street's S&P 500 and Nasdaq futures were up slightly. The AI sector faces a significant hurdle when Nvidia reports next week, with expectations of infrastructure demand and data center revenue affecting the outlook.
The US dollar has been under pressure due to the mounting US debt and policy uncertainties, prompting investors to seek scarce assets like gold. Its price remained steady at $4,513 an ounce, up 3.1% for the week. The euro gained 1% against the dollar, reaching a 14-week high. Brent oil prices hit a one-month high of $94.71, with a further drop to $93.12, a 5% weekly increase.
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.
