Asian stocks tumbled on Tuesday while bond yields surged, and the dollar climbed to more than five-month highs as Middle East tensions persisted and signs of resilient consumer demand in the U.S. meant the Federal Reserve could delay interest rate cuts this year.
Citing a strong economy and labor market alongside lingering inflation, San Francisco Federal Reserve Bank President Mary Daly said during a speech on Monday that there’s no urgency to cut interest rates.
Gold dipped in Asian trading while oil ticked higher as markets awaited Israel’s response to Iran’s first-ever direct attack on the country.
Chinese markets fell sharply as March data showed feeble demand.
Official data showed earlier in the day that China’s GDP grew 5.3 percent in January-March from the year earlier, beating expectations for a 4.6 percent increase.
At the same time, a raft of March indicators released alongside the GDP data – including property investment, retail sales and industrial output – underlined the persisting weakness in domestic demand.
China’s benchmark Shanghai Composite index slumped 1.65 percent to 3,007.07 while Hong Kong’s Hang Seng index plummeted 2.12 percent to 16,248.97.
Japanese stocks lost ground to hit an eight-week low after a jump in U.S. Treasury yields. The Nikkei average plunged 1.94 percent to 38,471.20 while the broader Topix index settled 2.04 percent lower at 2,697.11.
Tech stocks such as Advantest and Tokyo Electron fell around 4 percent each while Uniqlo-brand owner Fast Retailing dropped 1.8 percent.
Department store operator J. Front Retailing slumped 9.2 percent after slashing its annual profit forecast. Peer Isetan Mitsukoshi gave up 8.3 percent.
Seoul stocks succumbed to heavy selling pressure, with the Kospi average falling 2.28 percent to 2,609.63 amid speculation the Bank of Korea will not rush to lower borrowing costs. Rising oil prices amid heightened tensions in the Middle East also rattled markets.
Australian markets fell sharply, dragged down by banks, mining, energy and technology stocks. The benchmark S&P ASX 200 slid 1.81 percent to 7,612.50 while the broader All Ordinaries index ended down 1.84 percent at 7,862.30.
Across the Tasman, New Zealand’s benchmark S&P/NZX 50 index dipped 0.94 percent to 11,804.84.
U.S. stocks fell sharply overnight to extend last week’s sell-off while the 10-year yield jumped above 4.6 percent for the first time since November, as robust gains in March retail sales figures combined with upward revisions in the prior two months added to concerns about the outlook for interest rates.
The tech-heavy Nasdaq Composite and the S&P 500 plunged 1.8 percent and 1.2 percent, respectively to reach their lowest closing levels in almost two months, while the Dow shed 0.7 percent to hit a nearly three-month closing low.
Market Analysis
Asian Shares Slide On US Rate Worries, Mixed China Data
2024-04-16 08:35:23
