Hong Kong stocks lead regional declines
A series of geopolitical and economic headwinds have rattled markets this year, including rapid inflation, rising interest rates, the Russia-Ukraine war and Covid-19 lockdowns in China. US stock indexes slid to new lows for 2022 on Monday, with investors even marking down shares in sectors that have been relatively bright spots so far this year, such as energy producers.
Futures for the technology-focused Nasdaq-100 advanced 0.9% Tuesday afternoon in Asia. Those for the S&P 500 and the Dow Jones Industrial Average rose 0.5% and 0.4%, respectively.
Hong Kong-listed shares in Chinese technology giants tracked US declines in the sector. Alibaba shares fell 5.3% in Hong Kong, while those in Tencent retreated 2.9%. The Nasdaq Golden Dragon China Index of US-listed Chinese companies had declined 7.8% Monday.
“I’d expect near-term market volatility to persist in Asia, as markets deal with lingering supply chain challenges, the likelihood of higher inflation and the prospect of more restrictive global central bank policies,” said Matt Doody, an emerging-markets research analyst on Janus Henderson Investors’ global research team.
The firm’s emerging-market fund has tilted its portfolio away from long-duration growth stocks due to the risks of higher rates, Mr. Doody said. Duration is a measure of how sensitive the prices of bonds or other financial investments are to changes in interest rates, given the timing of future expected cash flows. Fast-growing tech stocks that are valued largely based on far-off forecast profits are longer-duration assets than shares in mature businesses.
The yield on the benchmark 10-year Treasury note stood at 3.024% on Tuesday in Asian trading, compared with 3.080% on Monday. The 10-year yield, which rises as bond prices fall, has climbed about 1.5 percentage points since the end of 2021.
In energy markets, Brent crude fell 0.7% to $105.20 a barrel. Oil prices had been rising for the past few months, but concerns that China’s lockdowns will sap demand for commodities have taken some steam off the rally.
The world’s largest cryptocurrency showed signs of stabilizing after a steep selloff in the previous session. Bitcoin traded at about $30,992 by early afternoon Tuesday in Hong Kong, according to CoinDesk. That was little changed from 5 pm ET Monday, when it stood at $31,075.70.
Write to Dave Sebastian at [email protected]
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