MARKETS: Asian stocks on the downswing – “Be prepared for an unstable month ahead”

In Asia, shares fell sharply on Wednesday, as bond interest rates have risen since the beginning of the week around the world to multi-year highs.

The interest rate on the US ten-year government bond reached its highest level in almost three years on Tuesday. The interest rate has continued to rise on Wednesday, approaching the five percent threshold.

In Japan, the interest rate on the country’s ten-year government bond exceeded three percent yesterday for the first time in thirty years.

In Australia, the corresponding interest rate rose to its highest level in more than 15 years. In Britain, on the other hand, the highest level since 2008 was reached on Tuesday.

“September started on a shaky note as the sell-off in developed market government bonds continued,” Singapore’s DBS:n the analysts wrote.

“Be prepared for a volatile month ahead as high yields cause concern across asset classes,” the analysts added.

“If the collapse of the bond market cannot be contained, policymakers will probably have to resort to more aggressive measures to limit yields.”

Interest rates have been raised by, among other things, inflation concerns, the uncertain world political situation and, most recently, the avalanche of bond sales by technology giants. Tech giants are selling their bonds to finance investments in the booming industry.

Oil rises, stocks fall

Brent crude oil futures rose to a five-week high on Wednesday after the US carried out a series of airstrikes on Iran on Tuesday.

On Wednesday morning, the price of Brent crude oil rose by 0.7 percent to just over $95 per barrel. The price of the US WTI oil grade was up 0.4 percent to just over $90 per barrel.

The United States has threatened Iran again on Wednesday with increasingly powerful strikes. Wednesday’s attacks have been aimed near the Strait of Hormuz, where Iran has threatened oil tankers. Iran, on the other hand, has struck at least US bases in Jordan and Iraq.

“The threat of further disruptions in the Strait of Hormuz has reignited concerns about inflation, leading to a sell-off in stocks in most major markets and a collapse in global bond markets,” Westpacin analysts estimate.

In South Korea, the Kospi index fell by 3.7 percent at the time of the review. Inter alia Samsung’s the stock fell 4.0 percent and SK Hynix 2.3 percent.

Japan’s Nikkei index was down 2.9 percent. Mainland China’s CSI 300 index was down 1.3 percent. Hong Kong’s main index Hang Seng fell 1.2 percent.

In Europe, the market is expected to open lower later in the morning. The future of the Euro Stoxx 50 index fell 0.5 percent.

Stoxx announced earlier, that network equipment company Nokia is rising to the Euro Stoxx 50 index. Nokia will enter the index on September 21.

Wall Street is also expected to open lower. At the time of review, the futures of the flagship index Dow Jones were down 0.03 percent, the futures of the broad S&P 500 index were down 0.09 percent, and the index futures of the technology-focused Nasdaq were down 0.2 percent.

On the foreign exchange market, one euro fetched 1.1576 dollars and 185.44 yen. One dollar equals 160.19 yen.