Hang Seng Index retreats amid bond selloff
Asian shares held their nerve on Friday as a relentless bond selloff pushed longer-dated US yields to two-decade highs, raising borrowing costs worldwide and threatening lofty equity valuations. In Hong Kong, the benchmark Hang Seng Index opened down 237 points, or 0.96 percent, at 24,523. The tech index was 42 points, or 0.99 percent, lower at 4,318 while the China Enterprises Index fell 93…
Asian stock markets showed resilience on Friday as bond yields hit historic highs, causing concern over rising borrowing costs globally. In Hong Kong, the main Hang Seng Index dropped 0.96%, trading at 24,523, while the tech index fell 0.99% to 4,318. The China Enterprises Index also saw a 1.13% decline, settling at 8,172. With many markets closed for autumn festivals, Tokyo's Nikkei opened slightly higher at 65,639 before surging to 80,807 within the trading session.
Risk assets faced pressure from a sharp decline in global bonds, driven by inflation and fiscal challenges prompting investors to seek higher returns, especially on long-term debt. Nigel Green, CEO of deVere Group, warned that ignoring this trend could have costly consequences. The 10-year Treasury yield hit a new 19-year high of 5.2251%, while 30-year yields rose to 5.5016%, the highest since 2004, pushing US mortgage rates to 7%.
Asian bond yields also climbed, with Japan's 10-year government bond yields reaching 3.115%, the highest since 1996, and Australia's 10-year yields at 5.408%. Fed funds futures indicated a 71% chance of another rate hike within the next month, suggesting further tightening could be on the horizon. The Fed's resumption of rate hikes is causing ripple effects across global markets, as smaller central banks adopt a more aggressive stance amid rising inflation pressures.
Written by urgent.news from RTHK News - Finance's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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