The Asia-Pacific stock market took a hit as escalating turmoil in the Middle East and rising Treasury yields caused investor unease. In Japan, the Nikkei 225 Index dropped 1.73% as the country’s September exports rose by 4.3% year-over-year, beating expectations. However, imports declined by 16.3% year-over-year, worse than anticipated. Additionally, Japan’s 10-year government bond yield surpassed 0.8%, reaching its highest level in a decade, following a global bond yield rally.
In China, the Shanghai Composite Index fell 1.44%, while new home prices for September dipped by 0.2% month-over-month and 0.1% year-over-year. Hong Kong’s Hang Seng Index also faced a decline of 2.07%, and India’s SENSEX dropped 0.51%. In Australia, the ASX 200 Index experienced a 1.36% drop after reporting job growth of 6.7K in September, falling short of the expected 20K. However, the country’s 10-year government bond yield rose above 4.7%, reaching its highest level in 12 years due to the rally in US bond yields.
In the United States, all three major indexes closed in the red on Wednesday. The escalating turmoil in the Middle East affected market sentiment, while the ongoing earnings season also contributed to investor caution. The Dow Jones Industrial Average dropped by 0.09%, the S&P 500 by 0.13%, and the Nasdaq Composite by 0.12%. Following this, US stock futures indicated a further decline, influenced by higher Treasury yields and escalating tensions in the Middle East.
Tensions in the Middle East escalated after a blast at a Gaza City hospital took the lives of hundreds of Palestinians, leading to political uncertainty in the region and the possibility of foreign intervention. Meanwhile, investors eagerly awaited a speech by US Federal Reserve Chair Jerome Powell for insights into the future of monetary policy.
On the currency front, it is worth keeping an eye on the exchange rates for JPY:USD, CNY:USD, AUD:USD, INR:USD, HKD:USD, and NZD:USD.
