SINGAPORE- Asian shares slid on Thursday as risk aversion prevailed in the market due to mounting worries over Middle East tensions, while gold prices stayed near two-month peaks with investors seeking safer assets.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.11 percent lower and on course for a 1.4 percent decline in the week. Japan’s Nikkei sank 1.35 percent .
The broad sell-off in US Treasuries continued into Asian hours with the yield on 10-year notes touching a fresh 16-year high as investors come to grips with the Federal Reserve’s messaging that interest rates may stay higher for longer. Yields rise when bond prices fall.
Anderson Alves, a trader with ActivTrades, said Asian equity markets were cautious, “spurred by traders adjusting their expectations for a lesser likelihood of a rate cut, increasing long-term yields, and mounting geopolitical uncertainties.”
US President Joe Biden pledged to help Israel and the Palestinians during a lightning visit on Wednesday, but a deadly hospital blast that he ascribed to an errant rocket fired by Gaza militants derailed talks to prevent the war spreading.
Investor concerns of geopolitical risks after a widening US chip export ban has cast a shadow over Chinese stocks despite some good news from a flurry of data on Wednesday that underscored an economy that was showing signs of stabilizing.
But worries over China’s property sector have kept investors jittery.
Country Garden on Wednesday was due to pay a $15 million coupon payment on a bond due September 2025, but two bondholders of China’s biggest private property developer told Reuters they were yet to receive it. Non-payment would put the developer at risk of default.
“Such uncertainties could trigger defensive stances in Asia’s short-term risk asset demand, especially as observers keep a vigilant eye on potential ripple effects,” said Alves.
China’s blue-chip stock index CSI300 fell 0.90 percent , while the Hang Seng Index sank 1.6 percent in early morning trade.
US stocks ended sharply lower on Wednesday as elevated Treasury yields weighed, with investors assessing the latest batch of quarterly corporate results and forecasts.
