Markets in Asia experienced a rollercoaster ride on Tuesday, with Chinese stocks initially surging before losing steam. The Shanghai Composite index closed 5.5% higher at 3,519.88, while the Shenzhen market gained 5.3%. However, the benchmark index had initially risen 10% before falling back as Beijing officials outlined plans to revitalize the world’s second-largest economy.
Hong Kong’s Hang Seng index, on the other hand, plummeted 5.8% to 21,758.45 as investors locked in profits from recent gains. According to Stephen Innes of SPI Asset Management, “China’s market rally has hit a roadblock, leaving investors feeling deflated.”
In other Asian markets, Tokyo’s Nikkei 225 index fell 1.2% to 38,861.09, while the Kospi in Seoul declined 0.5% to 2,596.38. Australia’s S&P/ASX 200 edged 0.2% higher to 8,187.10.
Meanwhile, US stocks took a hit on Monday, with the S&P 500 dropping 1% to 5,695.94 and the Dow Jones Industrial Average falling 0.9% to 41,954.24. The Nasdaq composite sank 1.2% to 17,923.90.
The decline in US stocks was attributed to rising Treasury yields, which hit their highest levels since the summer. The yield on the 10-year Treasury note rose to 4.02%, making it more attractive to investors seeking income. This, in turn, made stocks and other riskier investments less appealing.
The rise in Treasury yields was also influenced by the recent jump in oil prices, which surged 3.7% on Monday. Brent crude shed $1.23 to $79.70 per barrel, while benchmark US crude slipped $1.24 to $75.90.
Big Tech stocks, which have driven the majority of the S&P 500’s returns in recent years, were among the biggest losers on Monday. Apple fell 2.3%, Amazon dropped 3%, and Alphabet sank 2.4%. However, Nvidia bucked the trend, rising 2.3% on excitement about artificial-intelligence technology.
As the latest corporate earnings reporting season gets underway, companies will need to deliver bigger profits to drive their stock prices higher. Analysts expect earnings per share to have grown 4.2% during the summer for S&P 500 companies, led by technology and healthcare firms.
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