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.
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.
RSS