A bearish tone was seen in Asian markets as investors were left in a conundrum for equities after the US Treasury yields were at two-year high. Furthermore, a nosedive in global technology stocks left investors fretting about inflation and bracing for a stringent US monetary policy.
Crude oil prices were at a seven-year high on the back of pipeline outages from Iraq to Turkey, stoking fears of inflation causing a rise in the dollar and global tensions. Traders feared supply shortages after a drone attack on a fuel storage facility in the Middle East. Also, prices were higher on optimism of faster-than-expected global economic recovery from the Covid outbreak that could result in a surge of fossil fuels demand.
Australian market S&P/ASX lost around 1% in its level, while Japan’s Nikkei 225 underperformed counterparts with a steep fall of 2.8% as technology, Paper & Pulp, Railway & Bus and Real Estate sectors logged massive profit booking and worries over new restrictions due to rapid coronavirus outbreak added to woes
Ten-year yields pulled back from the 1.8900% level and were at 1.8860%, while five-year yields settled at 1.6795% which is the highest in two years.
South Korean market index Kospi shed nearly 1%, while China’s Shanghai Composite was marginally down. Hang Seng Index of Hong Kong was marginally up.
Gold prices logged downward trends and were trading at $1811.60 per ounce.
At the interbank forex market, the US dollar index strengthened at 95.760 points, while, the Australian Dollar surpassed its 5–day moving average at $0.71905, and sterling remained steady at 1.3601.
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