Asia stocks choppy as elevated yields temper Wall Street-led gains
Asian stocks traded in a mixed and volatile session on Tuesday, as heightened U.S. Treasury yields and soaring oil prices curbed risk appetite. The Nasdaq achieved a noteworthy 1.1% surge to a record high on Monday, while the S&P 500 expanded by 0.7% and the Dow Jones Industrial Average increased by 0.2%. Futures for U.S. stock indices closed largely flat around 03:43 GMT.
Japan’s Nikkei 225 climbed 0.6%, and the TOPIX index rose marginally by 0.4%. Hong Kong’s Hang Seng surged 0.6%, with the Hang Seng TECH sub-index jumping nearly 1%. However, South Korea’s KOSPI slipped 1% after opening higher, with Samsung Electronics (KS:005930) and SK Hynix (KS:000660) witnessing declines of 1.5% to 3%.
China’s mainland financial markets, which were closed for the National Day and Golden Week holidays, will reopen on Thursday, Oct. 8. Meanwhile, the 10-year Japanese government bond yield soared to 3.122% on Tuesday, marking its highest level since 2022, as it mirrored the upward trend in U.S. Treasury yields and anticipated further tightening by the Bank of Japan.
The overnight climb in U.S. 10-year Treasury yields to 5.349% — the highest level since 2002 — and the 30-year yield reaching 5.703% dampened equities by elevating borrowing costs and making bonds comparatively more appealing compared to riskier assets, especially in high-growth technology sectors. Australia’s S&P/ASX 200 climbed 0.6%, whereas Singapore’s Straits Times Index edged down by 0.2%. India’s Nifty 50 futures declined by 0.1%.
Investors were focused on the upcoming Reserve Bank of India’s policy announcement on Wednesday, anticipating a 25-basis-point rate hike. Additionally, they awaited the minutes of the Federal Reserve's September meeting, slated for Wednesday, for insights into policymakers’ outlook on inflation and the timing of additional rate hikes.
Oil prices remained a significant risk, with Brent crude hovering around $100 a barrel after falling 1.9% on Monday due to increased Middle East exports and the Group of Seven's pledge to enhance supply.
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