Asian stocks followed Wall Street's lead and fell sharply on Friday amid escalating fears that rising inflation will steer central banks around the world into another round of interest rate hikes.
Those concerns became more apparent overnight in New York where bond prices were punished, with the 10-year Treasury bond yield above the key 5 percent level as investors fretted about the prospect of higher rates.
The increase shows the market believes the US Federal Reserve is unlikely to cut interest rates, which have been anchored at 5.25 percent for a year and could instead push them further north.
PHOTO: AFP
While South Korea and Britain have left their benchmark interest rates unchanged, New Zealand in a surprise move jacked rates up 25 basis points to 8 percent, the highest in the developed world.
The European Central Bank also raised its key rate by a quarter point and indicated more could follow to combat inflation, with central banks elsewhere also focusing on the risks rising prices pose to national economies.
Wall Street shed 1.48 percent on Thursday, setting the tone for markets across Asia, where Tokyo slumped 1.52 percent with lower than expected numbers for machinery orders also weighing on sentiment.
New Zealand shed 1.22 percent, while the lowest Australian unemployment figures in 33 years is adding to pressure for a rate rise and Sydney was off 1.26 percent.
Hong Kong was down 1.40 percent, Seoul shed 1.47 percent, Singapore was down 1.54 percent, Kuala Lumpur shed 0.88 percent, Bangkok was off 0.90 percent, Jakarta slumped 1.88 percent and Mumbai was down 0.86 percent.
Support for heavyweight Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) limited Taipei's losses to 0.65 percent. Manila closed flat after bargain hunters moved in on the early sell-off.
However, China bucked the trend and closed 0.57 percent higher amid growing investor confidence in strong first-half corporate earnings after two weeks of uncertainty dogged the markets in Shanghai and Shenzhen.
TAIPEI
Share prices closed 0.65 percent lower as sentiment was punished by the slide on Wall Street overnight after rising bond yields deflated hopes for a US interest rate cut.
But dealers said the fall was cushioned by TSMC's positive showing after going ex-dividend.
The weighted index closed down 54.55 points at 8,300.71 on turnover of NT$133.73 billion (US$4.05 billion).
"Our market stood out with stronger resilience than other [markets] even if it could not walk away totally unscathed from Wall Street's overnight plunge," Jih Sun Securities Investment Co (
Investors are still hoping for a liquidity-driven upswing after the market has taken a breather, he said.
TOKYO
Share prices tumbled 1.52 percent, slipping below the 18,000-point mark after sharp falls on Wall Street and disappointing machinery orders data.
Dealers said the fall was in line with volatile trade across the region since the overnight beating on Wall Street, led down by concerns about US inflation and a potential interest rate hike.
The NIKKEI-225 index fell 274.29 points to 17,779.09.
Volume increased to 3.45 billion shares from 2.79 billion shares on Thursday.
HONG KONG
Share prices closed 1.4 percent lower, tracking Wall Street's slump overnight after a surge in US bond yields dashed hopes for a cut in interest rates later this year.
Dealers said rate-sensitive property counters led the falls, although the selling was spread fairly across the board.
The Hang Seng index closed down 291.01 points at 20,509.15.
SEOUL
Share prices slumped 1.47 percent as foreign investors cashed out after the market's record-breaking run following further heavy losses on Wall Street overnight.
The Bank of Korea's decision to keep its call rate target for June on hold at 4.5 percent failed to provide a boost, with the governor's comments on ample liquidity sparking fears of a possible interest rate hike in coming months.
The KOSPI index lost 25.76 points at 1,727.28.
SHANGHAI
Share prices closed 0.57 percent higher, supported by fresh fund inflows as investors anticipated strong first-half corporate results and looked past recent turbulence.
Dealers said the market opened lower, turned positive and fell again before steadying, continuing the recent volatility after the government's decision last week to triple the stamp duty tax sparked heavy losses.
The Shanghai Composite Index closed up 22.33 points at 3,913.14.
SYDNEY
Share prices closed 1.26 percent lower, hit by sharp losses overnight on Wall Street as investors fretted about the possibility of higher interest rates.
Dealers said local investors were already concerned by the prospect of tighter monetary policy following stronger-than-expected first quarter growth and employment figures earlier this week.
The S&P/ASX 200 fell 79.4 points to 6,231.7.
SINGAPORE
Share prices closed 1.54 percent lower after fears of possible hikes in global interest rates sparked a sell-off in the US, Europe and Asia.
The Straits Times Index closed down 54.74 points at 3,491.59.
KUALA LUMPUR
Share prices closed 0.88 percent lower in line with the weaker regional markets after Wall Street fell sharply overnight.
Dealers said sentiment was also undermined by the ringgit which weakened on foreign investors unwinding their positions.
The composite index was down 12.02 points at 1,352.39.
BANGKOK
Share prices closed 0.9 percent lower in line with a drop on Wall Street as investors remained jittery over higher US interest rates.
The composite index fell 6.83 points to 752.00.
JAKARTA
Share prices closed 1.88 percent lower after a slide on Wall Street overnight sent many Asian markets into negative territory.
The composite index closed down 39.361 points at 2,054.450.
MANILA
Share prices closed flat as bargain-hunters emerged in late trade and picked up stocks battered by Wall Street's overnight slump.
Dealers said this enabled the local market to cut early losses which were in line with a sell-off across the region on fears of rising interest rates.
The composite index ended down 2.06 points at 3,526.73.
WELLINGTON
Share prices closed 1.22 percent lower after fears about inflation and interest rates rattled local and overseas markets.
The NZX-50 gross index fell 51.17 points to 4,183.45.
MUMBAI
Share prices fell 0.86 percent in volatile trade as investors chose to unwind positions ahead of the weekend.
Dealers said software stocks gained on a weak rupee against the dollar, while automobile and steel stocks fell on fears of rising costs.
The 30-share SENSEX fell 122.37 points to 14,063.81.
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