You are here: Home » Reuters » News
Business Standard

Global Markets: Asian shares fall as North Korea suspends talks, U.S. yields climb


By and Tomo Uetake

SHANGHAI/TOKYO (Reuters) - Asian stock markets dipped on Wednesday after abruptly called off talks with Seoul, throwing a U.S.-North Korean summit into doubt, while surging yields revived worries about faster U.S. interest rate hikes that could curb global demand.

MSCI's broadest index of shares outside was down 0.2 percent as Pyongyang's move appeared to mark a break in months of warming ties between North and and with

A cancellation of the June 12 summit in could see tensions on the flare again even as investors worry about China-U.S. trade tensions and the sustainability of global economic growth.

"This will weigh on the Korean reconstruction beneficiaries that have had a strong run on peace and even reunification hopes recently," analysts wrote in a note.

"The broader risk for the region if talks do break down is that Trump no longer feels the need to keep on side and could escalate trade tensions again."

Strong U.S. sales and factory data on Tuesday pushed the U.S. 10-year yield through a key level to hit 3.095 percent, its highest since July 2011, raising worries about higher borrowing costs for companies worldwide.

The 10-year yield was last at 3.063 percent.

The rise in yields hurt U.S. share markets on concerns it would undercut stock valuations. [.N]

The Dow Jones Industrial Average fell 193.00 points, or 0.78 percent, to 24,706.41, the lost 18.68 points, or 0.68 percent, to 2,711.45 and the dropped 59.69 points, or 0.81 percent, to 7,351.63.

Elsewhere in Asia, Japan's Nikkei slid 0.4 percent, while South Korea's struggled for traction.

Stocks in dipped as traders awaited from a second round of Sino-U.S. trade talks in this week, with both sides believed to be still far apart. But Australian stocks bucked the trend and advanced 0.4 percent.


The strong U.S. data underpinned the dollar in currency markets.

The US dollar index, which tracks the greenback against a basket of six major rivals, hits a 2018 high of 93.46 on Tuesday and last stood at 93.31.

The euro fell to as low as $1.18155, its lowest level in about five months.

The dollar held firm at 110.27 yen after having hit a near four-month high of 110.45 yen on Tuesday.

The yen largely shrugged off data that showed Japan's shrank by 0.6 percent on an annualised basis in the January-March quarter, a sharper contraction than the median estimate of 0.2 percent and marking the end to eight straight quarters of expansion.

"U.S. data assured that the world is still in a synchronised global growth. If U.S. had been a disappointment, the market would have taken Japan's GDP more negatively," said Tohru Yamamoto, at

High-yielding Asian currencies were particularly vulnerable to higher U.S. yields, which could prompt investors to shift funds out of emerging markets.

The Indonesian rupiah hit a 2-1/2-year lows while the Malaysian ringgit hit a four-month low.

The South Korean won was steadier but the country's yields rose to the highest level since late 2014.

In commodities markets, gold slightly rebounded after hitting a 4 1/2-month low the previous day on a strong dollar.

It stood at $1,294 per ounce, off Tuesday's low of $1,289.30.

prices remained near recent highs amid concerns U.S. sanctions on may restrict crude exports from a

U.S. light crude was 0.4 percent lower at $71.06 after reaching $71.92 on Tuesday, its highest level since November 2014.

Brent traded at $78.21 a barrel, down 0.3 percent. On Tuesday, it reached an intraday peak of $79.47 a barrel, its highest since November 2014.

(Reporting by Andrew Galbraith, additional reporting by in SYDNEY; Editing by and Kim Coghill)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 16 2018. 09:36 IST