Asia report: Losses recorded across region, RBNZ stands pat
In a shaky day for Asia-Pacific markets, widespread losses were recorded across the region on Wednesday.
Notably weak performances were seen in Japan and South Korea, following a surge in the US 10-year Treasury yield to a level unseen in 16 years.
“Asian markets are experiencing that distinctive sea of red mirroring the latest global bond market sell-off driven by concerns about higher interest rates for longer,” said Stephen Innes at SPI Asset Management.
“This downturn has sent shockwaves across various asset classes, with global equities bearing a good chunk of the brunt as the bond rout turns vicious.”
Region’s bourses a sea of red, China still on holiday
Japan faced a sharp decline in its stock markets, with the Nikkei 225 index dropping by 2.28% to close at 30,526.88 and the Topix index shedding 2.49% to end at 2,218.89.
Leading the descent on Tokyo’s benchmark, Mitsubishi Motors, Credit Saison, and Mitsui Engineering & Shipbuilding saw drastic reductions in their stock values, plummeting by 7.22%, 7.2%, and 7.17%, respectively.
South Korea did not fare any better, with the Kospi index dwindling by 2.41% to 2,405.69.
The stocks of SKC, Hankook Tire, and SK Biopharmaceuticals were significantly impacted, witnessing their prices tumble by 7.64%, 7.2%, and 6.61%, respectively.
Mainland Chinese markets remained for the National Day holiday, having last traded on 28 September.
The Hang Seng Index experienced a 0.78% dip in Hong Kong, settling at 17,195.84.
Notable declines were seen in Baidu, Trip.com Group, and BYD Co shares, which slid by 4.1%, 3.79%, and 3.19%, respectively.
Down under, the Australian market also struggled, with the S&P/ASX 200 index decreasing by 0.77% to conclude at 6,890.20.
Companies like Coronado Global Resources, Virgin Money UK, and Summerset Group Holdings saw their shares plunge by 5.07%, 4.56%, and 4.19%, respectively.
New Zealand's market showcased a marginal movement, with the S&P/NZX 50 lowering 0.01% to 11,235.05.
Still, companies such as Vista Group International and KMD Brands observed significant share price reductions of 6.62% and 5.95%, respectively, while Westpac Banking Corporation experienced a 2.45% dip.
In the currency market, the dollar was last up 0.06% on the yen, trading at JPY 149.11, while it weakened 0.35% against the Aussie to AUD 1.5812 and rose 0.12% on the Kiwi to change hands at NZD 1.6943.
Moreover, oil prices also felt the sting of adverse market movements, with Brent crude futures last down 1.18% on ICE at $89.85 per barrel and the NYMEX quote for West Texas Intermediate decreasing 1.26% to stand at $88.11.
New Zealand's central bank maintains interest rates
In economic news, the Reserve Bank of New Zealand (RBNZ) retained its official cash rate at 5.5%.
The decision comes even though the country saw a GDP growth rate of 3.2% year-on-year in the quarter through June, exceeding previous projections.
However, the overarching sentiment from the central bank appeared to be one of restrained optimism, with clear indicators that the road ahead was still uncertain.
“The committee agreed that the official cash rate needs to stay at a restrictive level to ensure that annual consumer price inflation returns to the 1 to 3% target range and to support maximum sustainable employment,” the bank said in its statement.
Reporting by Josh White for Sharecast.com.