Asian shares drop on surging yields, oil selloff
Asian share markets performed weakly on Friday as an increase in U.S. bond yields dampened investors’ enthusiasm toward technology stocks. Moreover, a selloff in crude heavily dragged oil prices to their lowest levels in months.
MSCI’s broadest index of Asia-Pacific shares outside Japan recorded a 0.5% drop. This came after Wall Street’s choppy trade sent Japanese and South Korean shares down 0.7% and 1% respectively. Futures for the Nasdaq dropped 0.1%, while S&P 500 e-minis traded 0.2% higher.
Yields on U.S. 10-year notes reached a historic peak, and this would only strengthen the Federal Reserve’s stance of keeping its ultra-low interest rates until inflation accelerates.
Brent crude futures continued their downswing after a 7% decline seen overnight. U.S. crude, on the other hand, fell 35 cents to $59.65. This might put an end to a five-month rally as the decline erased four weeks of gains in just one session.