Asian Shares on Defensive, Hoping for China Stimulus Plan
March 25, 2014 2:53 PM EST
Asian shares were in a defensive mode on Tuesday after Wall Street fell overnight, though still-vague hopes of a new stimulus plan in China could improve investor sentiment.
Asian markets trade lower on 16 December (Reuters).
U.S. Treasuries prices fell, with the benchmark two-year yield hitting a six-month high as investors grew nervous that the Federal Reserve may raise interest rates sooner than expected. Bond yields rise when prices fall.
On Wall Street, the Nasdaq Composite Index led the losses with a fall of 1.2 percent to five-week low, as investors took some money off recent top performers such as biotech shares. The S&P500 Index fell 0.5 percent to 1,857.44.
Concerns over Ukraine and soft U.S. manufacturing were cited as possible catalyst, though market players noted the selling could also reflect unwinding of positions ahead of the quarter-end.
The survey on U.S. manufacturing by financial data firm Markit also showed U.S. manufacturing activity slowed in March.
U.S. President Barack Obama and major industrialised allies warned Russia on Monday it faces additional economic sanctions if President Vladimir Putin takes further action to destabilise Ukraine following the seizure of Crimea.
"In short, there's nowhere to put money at this point. Investors are generally upbeat on the U.S. but they want to see more evidence that the weakness in some of the recent data is due to a bad weather," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.
Yet short-term U.S. bond prices are under pressure after Federal Reserve Chair Janet Yellen said the Fed could raise rates six months after its current bond-buying programme ends - potentially as soon as spring 2015.
Even as the U.S. 30-year yield fell to 3.56 percent, near this year's low of 3.525 percent, short-dated debt yields moved in the opposite direction, flattening the yield curve sharply.
The U.S. two-year yield shot to six-month high of 0.4655 percent also due in part to caution over the two-year debt sale on Tuesday, the first leg of U.S. government issuance this week totalling $96 billion.
Rising U.S. short-term rates were undermining the attraction of precious metals, with gold was fetching $1,308.91 per ounce, close to Monday's near one-month low of $1,307.54.
Silver tumbled to a six-week low of $19.84 and last stood at $19.89.
In contrast, emerging markets were generally resilient after weak Chinese manufacturing data on Monday sparked expectations the Chinese government could unveil stimulus measures following Monday's weak survey of manufacturing.
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
Join the Conversation
- Twin Malaysia Airlines MH370, MH17 Aviation Disasters Create Phobia Among Travellers
- 2014 Ebola Outbreak: ‘Out of control… and Can Get Worse'; Asky Airline Stops Flying to Liberia, Sierra Leone; Liberia Closes Schools
- 5 Food Scandals That Shocked The World
- China Crackdown Against Christianity: Removes Church Cross, Cites Building Code Violation
- Australia’s Richest People Under 30 in 2014
- Samsung Galaxy S5 Alpha Leaks Online: Release Date, Five Features to Wait for New Smart Phone
- Freshly Leaked Apple iPad Air 2 Cases Confirm Touch ID Sensor; Release Date, Limited Specs and Price Listed
- Photos of Motorola Moto X+1 Prototype and Specs Leak Online, Release Date, Four Fresh Features Revealed
- Sony Xperia Z3: Release Date, Five Features to Expect from New Android Smart Phone
- Moto X Android 4.4.4 KitKat Update Guide: Schedule and How to Install
- Top Surprising Features Of iOS 8
- Top 4 Reasons Why iPhone 6 Will Hit Big Soon After its Sept 2014 Release Date