Asia report: Most markets lower as bond jitters linger

Most markets in Asia closed in negative territory on Monday, even after a stellar session on Wall Street on Friday following a significantly better-than-expected nonfarm payrolls report.

In Japan, the Nikkei 225 was down 0.42% at 28,743.25, as the yen weakened 0.18% against the dollar to last trade at JPY 108.51.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.72%, fashion firm Fast Retailing off 1.66%, and technology conglomerate SoftBank Group losing 2.36%.

Banking plays were in the green, with Mitsubishi UFJ Financial up 2.83%, Nomura ahead 3.17% and Sumitomo Mitsui Financial 2.14% firmer.

The broader Topix index was 0.14% weaker by the end of trading in Tokyo, closing at 1,893.58.

On the mainland, the Shanghai Composite fell 2.3% to 3,421.41, and the smaller, technology-heavy Shenzhen Composite slid 3.24% to 2,224.08.

South Korea’s Kospi was 1% lower at 2,996.11, while the Hang Seng Index in Hong Kong was 1.92% lower at 28,540.83.

Seoul’s blue-chip technology stocks closed weaker, with Samsung Electronics losing 0.12% and SK Hynix sliding 3.21%.

The moves lower in the Asia-Pacific region came after a roller coaster session stateside on Friday, in which stocks rocketed by the end of the day following sharp declines earlier.

That was on the back of the release of a much stronger-than-expected nonfarm payrolls report, which fuelled hopes for a more rapid recovery for the American economy following the Covid-19 crisis.

Oil prices were mixed at the end of the Asian day, with Brent crude last down 0.06% at $69.32 per barrel, while West Texas Intermediate flat at $66.09.

“A weekend breakthrough on the US stimulus front has done little to boost stocks, with rising yields expected to drive another sharp decline in US tech stocks,” said IG senior market analyst Joshua Mahony.

“Meanwhile, a weekend attack on Saudi oil facilities sent prices higher at the open.

“Overnight weakness throughout much of Asia has highlighted a feeling of pessimism around tech stocks, with the ASX 200 outperformance coming off the back of another surge in energy prices.”

Mahony said that “weekend breakthrough” saw the US Senate narrowly pass the $1.9trn financial support package, which was expected to drive a strong economic bounceback over the course of 2021.

“However, while economic strength should bring optimism around the environment for stocks, there is significant anxiety that those big 2020 tech outperformers will come under pressure as we prepare for the reopening.

“Rising yields over the course of recent weeks does provide a backdrop for investors to focus on value names, and this stimulus breakthrough provides yet another reason for upside in yields.”

In Australia, the S&P/ASX 200 was the region’s odd one out, rising 0.43% to 6,739.60, though it had given up most of its earlier gains by the close in Sydney.

Miners led the gains, with BHP up 2.38%, Fortescue Metals rising 0.5% and Rio Tinto 2.91% firmer.

The country’s big four banks were mixed, however, with Australia and New Zealand Banking Group down 0.42% and Westpac Banking Corporation falling 0.52%, while Commonwealth Bank of Australia rose 1.01% and National Australia Bank advanced 0.15%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.78% at 12,085.18, led lower by medical technology company Fisher & Paykel Healthcare, which was 4.2% weaker by the end of the day in Wellington.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.42% at AUD 1.3053, and the Kiwi retreating 0.64% to NZD 1.4047.