By
Steve Muchoki
April 16th, 2024
Stock markets across the Asia Pacific entered heavy correction following strong market correction on Wall Street due to rise in bond yields.
On Wednesday, September 29, stocks in the Asia Pacific markets came crashing down. This happens following the overnight crash on Wall Street. On Tuesday, Dow Jones (INDEXDJX: .DJI) tanked 570 points or 1.63%.
On the other hand, the S&P 500 (INDEXSP: .INX) tanked 2% closing at 4,352 levels. Similarly, the Nasdaq Composite (INDEXNASDAQ: .IXIC) tanked nearly 3% or 423 points. The market reacted negatively to the rise in the bond yields.
The same scenario was repeated earlier today in the Asia-Pacific market. Japan’s Nikkei 225 crashed 2.12% earlier today closing at 29,544.29. On the other hand, the Topix index dropped 2.09% by closing the trading at 2,038.29.
Mainland Chinese stocks also recorded deep losses with Shanghai Composite down by 1.83% to 3,536. similarly, the Shanghai Component was down 1.64% to 14,079.02. South Korea’s Kospi also declined 1.22% giving a closing at 3060 levels.
China Evergrande Group Sells $1.5 Billion Worth Stake
China’s beleaguered real-estate giant – China Evergrande Group – has been in deep water recently. Its mounting $300 billion debt sent shockwaves in the global market.
However, in a filing at the Hong Kong exchange on Wednesday, September 29, the Evergrande Group said it will be selling $1.5 billion worth of stake in Shengjing Bank to a state-owned asset management firm. This comes as the real-estate group is facing a $47.5 million bond interest payment deadline on Wednesday. Besides, it also owes payments to banks and other suppliers.
As a result, Evergrande Group will be selling the 1.75 billion shares it owns in Shengjing Bank at 5.70 yuan per share. This decision has brought some relief. Despite the broader sell-off in Asia Pacific markets today, Hong Kong’s Hang Seng ended in green today. Shares of the China evergrande Group also surged 10% today.
Tech Stocks Tank with Rising Treasury Yields
Tech stocks on Wall Street fell overnight dragging down Nasdaq Composite. Yesterday was the worst day for Nasdaq since March 2021. Tech stocks usually react negatively to the rising bond yield. This is because high bond yields make the future cash flows of these companies less valuable. Instead it makes popular stocks appear overvalued.
On Wednesday, September 29, tech stocks in Asia also tanked significantly. Japanese conglomerate Softbank group dropped 1.46%. similarly, south Korea’s Samsung Electronics Co Ltd (KRX: 005930) tanked 2.88%.
In China, Tencent Holdings Ltd (HKG: 0700) tanked 1.02% while Alibaba Group Holding Ltd (HKG: 9988) dropped by 1.72%. The Hang Seng Tech index fell 0.84% to 6,179.43.