Asian Shares Mixed As Rising Yields Weigh

Asian stocks turned in a mixed performance on Tuesday, as rising bond yields weighed on growth stocks ahead of crucial U.S. inflation data and the ECB policy meeting.

Amid elevated risks to global growth, investors continued to monitor developments on the war in Ukraine and the Covid-19 situation in mainland China.

Chinese shares reversed early losses to end sharply higher after the country’s securities watchdog urged listed companies and their major shareholders to repurchase shares and support the sluggish stock markets.

The benchmark Shanghai Composite Index jumped 1.5 percent to 3,213.33 as some residents of Shanghai stepped out of their homes for the first time in more than two weeks. Hong Kong’s Hang Seng Index rose 0.5 percent to 21,319.13.

Japanese shares led regional losses to end at nearly four-week lows after a sharp overnight drop on Wall Street. The Nikkei 225 Index slumped 1.8 percent to finish at 26,334.98, with tech stocks underperforming on worries over stretched valuations. Screen Holdings, Tokyo Electron and Advantest gave up 2-4 percent.

Uniqlo clothing shop owner Fast Retailing tumbled 3.2 percent and robot maker Fanuc plunged 5.5 percent. Takashimaya jumped 4.1 percent after the department store operator forecast a better than expected annual profit.

Australian markets ended off their day’s lows after a survey from National Australia Bank showed its index of business conditions doubled to +18 in March.

The benchmark S&P/ASX 200 Index ended 0.4 percent lower at 7,454, dragged down by technology and biotech stocks. Gold miners bucked the weak trend as inflation risks mounted.

Seoul stocks ended lower for a second straight day on concerns over China’s economic slowdown and tightening monetary policy by the Federal Reserve to counter inflation. The Kospi slid 1.0 percent to settle at 2,666.76.

Game developer Krafton lost 5.2 percent and battery maker LG Energy Solution fell 3.3 percent, while Kakao Pay, the fintech arm of internet giant Kakao, rallied 3.1 percent.

New Zealand shares ended modestly lower, with the benchmark NZX-50 Index closing down 0.4 percent at 11,889.17 on fears over high inflation and rising interest rates.

Economists are divided as to whether the Reserve Bank of New Zealand should raise its benchmark rate by 25 bps or 50 bps at Wednesday’s meeting.

U.S. stocks fell sharply overnight as investors grew increasingly concerned about soaring Treasury bond yields and a surge in Covid-19 cases across different Chinese cities.

The Dow dropped 1.2 percent, the S&P 500 shed 1.7 percent and the tech-heavy Nasdaq Composite plunged 2.2 percent.

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