Asian equities are plummeting as US earnings rise driven by technology equities

Author: Alun John

HONG KONG (Reuters) – Asian equities fell on Wednesday as higher US Treasury yields affected global technology companies and pushed the dollar to a five-year high against the Japanese yen.

U.S. yields rose on Tuesday as bond investors prepared to raise interest rates from the Federal Reserve for half a year to keep up with high inflation.[US/]

Returning the market outlook to the prospect of rising US interest rates has boosted the growth of growth-sensitive stocks, such as technology companies, to those that provide revenue, such as finance and industry.

MSCI’s broadest Asia-Pacific stock index lost 1% outside of Japan after hitting a three-week high the day before, while it changed little.

US stock futures also fell 0.25% and Nasdaq e-mines lost 0.48%. The future of Europe was flat.

“From an Asian perspective, it’s a bit of a risk-free tone, because one of those days with higher bond yields is bad, because while they reflect a stronger U.S. scenario, they tend to favor the dollar more than the local currency,” Rob Carnell said. ING Asia Pacific Heads of Research.

“But it’s pretty confusing, we may come back to thinking that higher performance tomorrow reflects a stronger global background,” Carnell said.

He said the decline in Nasdaq has dragged down major technology stocks in Asia.

In Japan, Nintendo fell by 1.7% and Samsung by South Korea (KS 🙂 by 2.5%.

In Hong Kong, technology stocks lost 3.7% with increasing pressure from Chinese fines Alibaba (NYSE :), Tencent and Bilibili (NASDAQ :).

Shares of U.S. equities on Tuesday weighed 1.3% on heavy Nasdaq technology, although the rise in profitability boosted banks. The industry names helped close the record-breaking high and hit the highest daily highs of all time. [.N]

U.S. five-year banknotes, which reflect expectations of a rate hike, rose to their highest level since February 2020 on Monday, while two-year banknotes reached their highest level since March 2020.

The benchmark U.S. 10-year Treasury yield hit a six-week high on Tuesday, with the latest at 1.6473%. [US/]

The minutes of the Fed’s December meeting, at 1900 GMT, may highlight the fact that U.S. policymakers are ready to tighten their new sensitivity to inflation and tighten their policy.

“The market is now speculating that a March rate hike is possible when the Fed stops buying assets, and so profits are rising,” said Edison Pun, senior market analyst at Hong Kong’s Saxo Markets in Hong Kong.

He said he believed the decline in technology stocks would be short-term, and that the rise in profits would help bank shares.

Shares of HSBC’s Hong Kong-listed shares rose 2.3% on Wednesday, although China’s bad debt manager Huarong lost 50% when it resumed trading after a nine-month hiatus, allowing investors to value the company in the dispute.

On the mainland, China Mobile (NYSE 🙂 gained 3.4% in its Shanghai debut on Wednesday, the company raised $ 7.64 billion in a decade in the country’s largest public offering.

In currency markets, the yen fell from $ 116.04 to $ 116.34 per day, the lowest since March 2017, while the bond against the six peers stood at 96,226, the strongest end of the last quarter.

As the Bank of Japan is expected to arrive late in the queue to raise rates, the gap between U.S. and Japanese yields is widening, hurting the yen. [FRX/]

Oil prices remained stable with gains in the previous session. futures were flat at $ 79.99 a barrel, and futures were $ 76.75 a barrel.[O/R]

It was at $ 1,814 an ounce, stable at the end of the day and at the high end of the final stretch.