• Notification Date: 31-12-2024
• Notification No: N/A

Asian Stocks Drop As Strong US Treasury Yields Drag Wall Street Valuations Down

Asian shares opened weakish for the week as yields in US Treasuries continue to exert pressure on equity valuations. Rising readings in US Dollars, which remain near multi-month tops, have further made investors be on tenterhooks regarding potential spillover to larger markets.

MSCI's Asia-Pacific shares excluding Japan lost 0.2 percent but are up 16 percent for the year. Nikkei in Japan lost 0.9 percent but still stands at a healthy 20% rise for 2024. The South Korea market has been in limbo with a loss of 9 percent so far this year due to ongoing political instability, but the index climbed 0.3 percent on Monday.

Shares of a South Korean budget carrier plummeted to a record low after a fatal crash that killed 179 people. China's blue-chip stocks advanced 0.3% and increased about 16% this year, supported by September stimulus statements.

The S&P 500 and Nasdaq stock futures traded slightly lower in the U.S. as the broader selloff on Friday persisted. Wall Street did not find a clear reason for the decline, but concerns about valuations remain: The S&P 500 is up 25% for 2024 and the Nasdaq 31%. When Treasury yields rise to an eight-month high, the risk-free return from bonds makes stocks less appealing.

The strength of the dollar in the United States is again weighing on currencies around the world. As the euro falls over 5% for the year, gold prices remain up 28% but are pressured by the strong dollar. Oil prices have stayed relatively steady, with Brent crude inching up to $74.23 a barrel.