Asian Shares Tumble On Inflation, Interest-rate Concerns

(RTTNews) - Asian stocks ended deep in the red on Thursday as the dollar and U.S. bond yields continued to surge on bets that global interest rates will stay higher for longer.

Traders also looked ahead to the release of key inflation readings from the euro zone and the U.S. for additional clues on the future path of monetary policy.

The U.S. core personal consumption expenditures (PCE) price index report will be released on Friday following signs of softening price pressures in the recent CPI survey.

The Japanese yen tried to recoup from a four-week trough as Japanese 10-year treasury yields spiked to 13-year highs.

Gold and oil prices were slightly lower in Asian trading as Israel's national security adviser, Tzachi Hanegbi, appeared to reject the idea of a quick end to the war.

China's Shanghai Composite index dropped 0.62 percent to 3,091.68 as the International Monetary Fund upgraded the country's 2024, 2025 GDP growth forecasts but warned of risks ahead.

Hong Kong's Hang Seng index tumbled 1.34 percent to 18,230.19 ahead of the release of China's official Purchasing Managers Index data for May.

Japanese markets fell sharply as domestic government bond yields notched fresh multi-year peaks on expectations of another rate hike by the Bank of Japan.

The Nikkei average fell 1.30 percent to 38,054.13, extending losses for a third consecutive session and hitting a one-month low. The broader Topix index closed 0.56 percent lower at 2,726.20.

Top technology stocks bore the brunt of selling, with Advantest plunging 6.1 percent. Peer Tokyo Electron, SoftBank Group and Uniqlo parent firm Fast Retailing all fell over 2 percent.

Seoul stocks retreated ahead of industrial production figures due on Friday. The Kospi average settled 1.56 percent lower at 2,635.44, dragged down by technology stocks.

Market bellwether Samsung Electronics lost 2.3 percent and No. 2 chipmaker SK Hynix plummeted 3.4 percent.

Australian markets ended down for a third straight session after April inflation data stoked speculation of another interest rate hike by the Reserve Bank.

The benchmark S&P ASX 200 index dipped 0.49 percent to 7,628.20 while the broader All Ordinaries index closed half a percent lower at 7,895.90.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index fell 1.04 percent to 11,557.21 amid concerns that the Federal Reserve is unlikely to cut rates any time soon.

U.S. stocks ended lower overnight as bond yields spiked for a second day on uncertainty about the Federal Reserve's interest-rate path.

The yield on the benchmark ten-year note hit its highest level in nearly a month after a $44 billion auction of seven-year Treasury notes was met with tepid demand.

The Dow fell 1.1 percent to reach its lowest closing level in almost a month while the S&P 500 gave up 0.7 percent and the tech-heavy Nasdaq Composite declined 0.6 percent.