- Breaking News - Original Reporting - News Analysis

Global shares mixed after broad slide on Wall Street

Shares rose Wednesday in Europe after sharp declines in Asia that tracked a broad slide on Wall Street on jitters over the economic process and surging U.S. government bond yields.

A swift rise in Treasury yields is forcing investors to reassess whether prices have run too high for stocks, particularly the foremost popular ones. On Tuesday, the yield on the 10-year Treasury jumped to 1.54%, its highest level since late June. That’s up from 1.32% a week ago.

Early Wednesday, it had fallen back to 1.50%.

“What we got in is a stock exchange that finally looks vulnerable as Treasury yields surge, oil prices look like they might easily hit $90 a barrel, and as supply chain issues show no signs of easing,” Edward Moya of Oanda said during a commentary.

Germany’s DAX picked up 0.7% to 15,358.67 and therefore the CAC 40 in Paris also added 0.7%, to 6,551.59. Britain’s FTSE 100 gained 0.7% to 7,079.21.

U.S. futures also advanced, with the contract for the Dow industrials up 0.5%, while the future for the S&P 500 was 0.6% higher.

In Asian trading, Tokyo’s Nikkei 225 sank 2.1% to 29,544.29 and therefore the Kospi in Seoul dropped 1.2% to 3,060.27. The Shanghai Composite index shed 1.8% to 3,536.29. In Sydney, the S&P/ASX 200 gave up 1.1% to 7,196.70.

Hong Kong’s Hang Seng index reversed earlier losses, gaining 0.7% to 24,663.50 after troubled property developer Evergrande Group said it had been selling a stake in Shengjing Bank for 9.9 billion yuan ($1.5 billion) — a step toward addressing its cash crunch.

Evergrande’s Hong Kong-traded shares jumped 15%.

In Japan, the selection by the ruling Liberal Democrats of Former foreign minister Fumio Kishida to go the party and thus become the next prime minister came after markets had closed.

Kishida, 64, is seen as an institution figure, though he has involved measures to address growing inequality in Japan, the world’s third-largest economy.

On Tuesday, the benchmark S&P 500 index fell 2%, its worst drop since May, and therefore the tech-heavy Nasdaq fell 2.8%, its worst drop since March. Decliners outnumbered advancers on the ny stock market 4 to 1.

The Dow Jones Industrial Average lost 1.6% and also the Russell 2000 index dropped 2.2%.

The benchmark S&P 500 is down 3.8% so far this month and on pace for its first monthly loss since January after it gained nearly 16% since the start of 2021.

Bond yields started rising last week after the federal reserve sent the clearest signals yet that the central bank is moving closer to start withdrawing the unprecedented support it’s provided for the economy throughout the pandemic. The Fed indicated it’s going to start raising its benchmark interest rate sometime next year and can likely begin cutting back the pace of its monthly bond purchases before the end of this year.

A rise in yields means Treasurys are paying more in interest, which gives investors less incentive to pay high prices for stocks and other things that are riskier bets than super-safe U.S. government bonds. The recent upturn in rates has hit tech stocks particularly hard because their prices look more expensive than much of the rest of the market, relative to how much profit they’re making.

Companies are warning that provide chain problems and higher prices could crimp sales and profits. The Federal Reserve System has maintained that rising inflation is temporary and tied to those supply chain disruptions because the economy recovers from the pandemic.

In other trading, U.S. benchmark crude oil gave up 58 cents to $74.71 per barrel in electronic trading on the New York Mercantile Exchange. It lost 16 cents to $75.29 per barrel on Tuesday.

Brent crude oil, the standard for international pricing, declined 60 cents to $77.75 per barrel.

The U.S. dollar slipped to 111.30 Japanese yen from 111.48 yen. The euro fell to $1.1663 from $1.1683.

Leave A Reply

Your email address will not be published.