Investing.com - Increases in yields of U.S. Treasuries put pressure on Asia equities at the open Wednesday, with markets in the region poised to take a cue from drops in the U.S. overnight.
All major indices in the U.S. experienced significant drops Tuesday as the yields on 10-year Treasuries topped 3%, pushing up the dollar and increasing the prospect of inflation.
Hong Kong, China, Japan and South Korea all started Wednesday in the red, while Australia was closed for ANZAC Day.
In Hong Kong, the benchmark Hang Seng Index was down 0.58% at 9:35PM ET (01:30 GMT), giving up some of their gains from the day before.
Hong Kong shares climbed Tuesday, with the Hang Seng Index rising 1.26%, thanks to energy firms getting a lift from gains in oil prices and airline stocks climbing. A focus was United Company Rusal Plc (HK:0486), the Hong Kong-listed Russian aluminium group, whose shares skyrocketed by 40% after the U.S. offered to lift sanctions on the firm.
In China, the Shanghai Composite Index was down 0.37% shortly after the opening while the Shenzhen Composite Index was down 0.36%.
Shares in both of China’s exchanges in Shanghai and Shenzhen put in solid performances on Tuesday, as did Hong Kong. The Shanghai Composite Index rose 1.99% and the Shenzhen Composite Index raked in 2.28%.
Both Hong Kong and Chinese stocks were given a lift Tuesday by declarations from the Chinese government in Beijing that the country is determined to hit its economic targets, increase domestic demand and continue to shore up credit markets, equity markets, bond markets, forex markets and property markets. The assurances may go some way towards reassuring investors jittery about trade tensions between China and the U.S.
But big drops in the U.S. soured at least some of the mood and put pressure on most Asian bourses.
Japan’s Nikkei 225 was trading down 0.42% halfway into the morning session while South Korea’s Kospi was down 0.52%.
Facing pressure from rising bond yields, the Dow Jones Industrial Average gave up 1.74%, while the S&P 500 lost 1.34%. Tech-heavy Nasdaq lost 1.7%. Both the Dow and the S&P 500 gave up their gains for April after their losses Tuesday.