Asia report: Stocks sink as oil prices, bond yields climb

(Sharecast News) - Stock markets across Asia suffered heavy losses on Thursday as a steep rise in oil prices and profit-taking in the AI sector weighed heavily on regional indices.

The Nikkei 225 and Hang Seng both fell 1.4% apiece, when the Sensex declined 1.6%, the KOSPI sank 2.6% and the STI tanked 3.5%. Trading in Mainland China also resumed after the Golden Week public holiday, with the Shanghai Composite dropping 0.8%.

Singapore's STI was the standout underperformer, as heavyweights in the banking sector came under heavy selling pressure amid concerns about rising bond yields and inflation. UOB, OCBC, and DBS all suffered sharp losses.

In Seoul, chip blue chips Samsung Electronics and SK Hynix were both firmly lower as the recent AI rally ran out of steam. Samsung was lower despite the company guiding to a third-quarter operating profit of KRW107trn, a near-ninefold increase year-on-year.

Over in Tokyo, industrial stocks and financials weighed heavily on the benchmark index, with Komatsu and Mitsui & Co among the worst performers.

Front-month Brent crude futures surged 4% to hit the $104-a-barrel mark after a tanker offshore Qatar was hit by multiple projectiles. Reports that the White House was considering imminent strikes against Iranian targets ahead of next months' mid-term elections also raised fears of further supply disruptions across the Middle East.

Also dampening the demand for equities was another rise in US Treasury yields, which are currently at their highest levels since mid-2002, amid increasing inflation projections and the possibility of rate hikes before the year-end. The 10-year US Treasury yield was up 5.5 basis points at 5.350%, slightly below the 24-year high of 5.365% reached in intraday trading on Wednesday.

In economic news, data revealed that sentiment in the Japanese service sector rose to a seven-month high in September, though remained firmly in negative territory. The Eco Watchers Survey released by the Cabinet Office rose to 47.0 from 46.4 previously, coming in ahead of the 46.8 consensus forecast.

Meanwhile, the Japanese current account surplus rose more than expected to JPY4.06trn in August, from JPY2.99trn in July and JPY3.63trn a year earlier..