Stock market: Asia down. Oil prices surge again
Tokyo and Seoul in the red. Tensions on the government bond market
In Asia, share markets are falling due to tensions over government bonds, exacerbated by reports that some major technology firms are seeking to raise billions through debt issues, thereby competing directly for limited funding.
Oil prices have surged again due to an increase in attacks on ships in the Gulf, putting further pressure on Treasury bonds, although a successful auction of ten-year US government bonds, held overnight, helped to push yields down from their 24-year highs.
Whilst high yields have bolstered the dollar, the euro has fallen to near its lowest level in 17 months, with concerns over France’s finances spilling over into Italian and Greek debt.
The steady rise in borrowing costs has put equities on the back foot, with Japan’s Nikkei index falling by 1.1 per cent, whilst South Korea’s index plummeted by 2.1 per cent. The broader MSCI index of Asia-Pacific equities, excluding Japan, fell by 1.2 per cent.
On Wall Street, S&P 500 and Nasdaq futures both fell by 0.1 per cent. In Europe, EUROSTOXX 50, DAX and FTSE futures remained unchanged following Wednesday’s fall.
