Asia Shares Rebound After Selloff
Asian stocks rose on Thursday as a selloff in global equities and bonds abated. The rebound came after a volatile session on Wall Street, where the S&P 500 Index closed lower for the fourth consecutive day.
U.S. Markets
U.S. stocks dropped on Wednesday as investors weighed the prospects of higher inflation and rising bond yields. The S&P 500 Index fell 0.7%, while the Dow Jones Industrial Average dropped 0.9%. The Nasdaq Composite Index declined 0.5%.
The selloff was sparked by a jump in U.S. Treasury yields, which rose to their highest level since February 2020. The 10-year yield rose to 1.77%, while the 30-year yield climbed to 2.51%.
Asian Markets
Asian markets followed Wall Street lower on Thursday, with Japan’s Nikkei 225 Index dropping 0.7%. Hong Kong’s Hang Seng Index fell 0.4%, while the Shanghai Composite Index declined 0.2%.
However, the losses were pared in the afternoon session as investors began to take a more optimistic view of the market. The Nikkei 225 Index rose 0.3%, while the Hang Seng Index gained 0.2%. The Shanghai Composite Index was up 0.1%.
Australian Markets
Australian stocks rose on Thursday, with the S&P/ASX 200 Index gaining 0.3%. The index was supported by gains in the energy and materials sectors, which rose 1.2% and 0.9%, respectively.
The Australian dollar rose 0.2% against the U.S. dollar, while the yield on 10-year Australian government bonds rose to 1.71%.
Regional Markets
In other regional markets, South Korea’s Kospi Index rose 0.3%, while the Taiwan Weighted Index gained 0.2%. Singapore’s Straits Times Index was up 0.1%.
Commodities
Oil prices rose on Thursday, with Brent crude futures up 0.3% to $63.17 a barrel. Gold prices were little changed at $1,741.90 an ounce.
Outlook
The rebound in Asian markets suggests that investors are becoming more optimistic about the outlook for the global economy. The U.S. Federal Reserve has indicated that it will keep interest rates low for the foreseeable future, which should support equity markets.
At the same time, the rise in bond yields is likely to continue to weigh on stocks. Investors are concerned that higher yields could lead to higher borrowing costs and slower economic growth.
Overall, the outlook for Asian markets remains uncertain. Investors will be closely watching economic data for signs of a recovery, as well as any further developments in the U.S. bond market.