Asian shares advance as United States bond yields push dollar higher

Brent crude oil was last down 0.2% at $73.72 a barrel but up 10.2% for the year, increasing material costs for some companies.

Oil prices were nudging north, but were below the more than three-year highs hit in the previous session as rising US fuel inventories and production weighed on an otherwise heavily bullish market. The Dow Jones industrial average fell less than 0.1 percent to 24,448.69. Wall Street shares had skidded on Wednesday, with the S&P 500 .SPX slumping 1.34 percent, the most in two-and-a-half weeks.

Higher government bond yields typically mean higher costs for companies and consumers to borrow money and can make bonds look more attractive relative to stocks.

Euro zone bond yields - yields are a proxy of borrowing costs - were dragged up in the slipstream of the US moves though Thursday's looming European Central Bank meeting ensured there was a touch of caution.

After climbing above $75 a barrel to their highest since November 2014, Brent crude oil prices, the global benchmark, and US crude prices were lower as concerns over the possibility that the United States might reinstate sanctions against Iran faded. "But the Federal Reserve signalled in March that its rate hikes would be gradual", said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. Earlier this month the US imposed sanctions that bar citizens from doing business with numerous Russian businessmen, including Deripaska, as well as several Russian officials and companies.

The US 10-year bond yield later backed off that level and stood at 2.964 per cent in Tuesday's Asian trade.


Besides that, financial markets will take into account where the core USA inflation rate is headed for.

Analysts are gearing up for a deluge of major earnings reports. The stock plunged 8.3 percent to $192.27. That division will combine with Vets FirstChoice as a new publicly traded company, and Henry Schein expects to get at least $1 billion in cash from the tax-free move. Should it climb above 3.041 percent, its peak in January 2014, it will likely move into territory last seen in summer 2011.

Higher US yields and a stronger dollar weighed on non-yielding gold, with spot prices slipping to a five-week low of US$1,318.51 an ounce overnight. That helped energy companies finish higher.

Merck & Co Inc helped lift the healthcare sector, 2.4 percent following a Goldman Sachs upgrade to "buy". Brent crude, used to price worldwide oils, gained 0 cents to $74.91 per barrel in London. Natural gas stayed at $2.74 per 1,000 cubic feet.

"The break of 108 triggered a lot of stops and buying interest on the options market as well", said Tareck Horchani, head of sales trading in Asia-Pacific for Saxo Markets in Singapore, referring to the dollar's jump on Monday. Copper lost 0.8 percent to $3.11 a pound. The Philadelphia Stock Exchange semiconductor index fell 1.3 percent Monday, extending its four-day slide past 6 percent.

The CAC 40 in France gained 0.5 percent. Britain's FTSE 100 rose 0.2 percent. Rusal shares in Hong Kong posted their biggest-ever gain.


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