Stocks fall

    306

    SYDNEY/NEW YORK- Asian stocks were lower on Tuesday as rising bond yields impacted tech shares and company valuations in China and Korea and investors grappled with their inflation fears as the United States looks set to pass a $1.9 trillion stimulus package.

    MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.79 percent lower while Korea’s Kospi fell by 1.88 percent, its fourth straight session of losses. Japan’s Nikkei pared back earlier losses in the session to be 0.24 percent higher.

    US Treasury Secretary Janet Yellen said on Monday that President Joe Biden’s coronavirus aid package would provide enough resources to fuel a “very strong” US economic recovery, and noted “there are tools” to deal with inflation.

    Despite the positive cues, investors remain conflicted over whether the stimulus will help global growth rebound faster from the COVID-19 downturn or cause the world’s biggest economy to overheat and lead to runaway inflation.

    “The chance of our seeing more inflation in the economy is meaningfully increased by the monetary policy actions and the fiscal policy actions that we’re seeing around the world,” Goldman Sachs Chief Executive Officer David Solomon told a conference in Sydney via webcast.

    “There is certainly a reasonable outcome where inflation accelerates more quickly than people are expecting, and that will obviously have an impact on markets and volatility.”

    The technology sector and other richly valued companies have been highly susceptible to the rising rates. – Reuters