Stocks slip

    211

    MIAMI- Asian stocks dipped on Tuesday as rising US Treasury yields and inflation prospects led to a further rotation out of the big tech stocks responsible for a major Wall Street rally during the pandemic.

    The Australian S&P/ASX 200 fell 0.11 percent and South Korea’s Kospi declined 0.87 percent in early trading. Hong Kong’s Hang Seng index futures rose 0.54 percent. Japanese markets are closed for a public holiday on Tuesday.

    Oil prices rose on a tight global supply outlook after US production was hammered by frigid weather and an approaching meeting of top crude producers is expected to keep output largely in check.

    Bond yields have risen sharply this month as prospects of more US fiscal stimulus boosted hopes for a faster economic recovery globally.

    However, that is also fuelling inflation expectations, prompting investors to sell the growth stocks that drove the equity rally during the pandemic.

    “The sell-off in bonds is like a car crash in slow motion for equity investors,” said Michael McCarthy, chief market strategist at broker CMC Markets in Sydney. “A higher interest rate environment forces investors to consider the opportunity costs of investments. Stocks that have significant borrowing, or produce no income for investors, may be particularly vulnerable.”

    On Wall Street, the Dow Jones Industrial Average .DJI rose 0.09 percent, eking a small gain.

    The S&P 500 lost 0.77 percent and the Nasdaq Composite dropped 2.46 percent.