Asia report: Tech stocks lead markets lower as oil prices, bond yields rise

(Sharecast News) - Asian equity markets finished mostly lower on Tuesday, led by heavy losses in Tokyo as the Nikkei 225 snapped a five-day winning streak, as risk appetite was sapped by rising oil prices and bond yields.

The Nikkei 225 finished 2.5% lower after having surged 5.5% over the past five sessions to finish at its highest since 6 July on Monday.

Benchmarks in Hong Kong and Shanghai rose 0.1% and 0.2%, respectively, while Bombay's Sensex fell 0.4%, Singapore's STI fell 1.3% and Seoul's KOSPI dropped 1.6%.

Oil prices rose on Tuesday, with Brent crude holding above the $90-a-barrel mark amid ongoing delays in reopening the Strait of Hormuz due to a lack of progress in US-Iran talks.

At the same time, Japanese 10-year bond yields hit a new 30-year high of 2.945% during the session amid growing speculation that the Bank of Japan will tighten monetary policy more quickly due to inflationary pressures. US 30-year Treasury yields hit their highest in nearly 20 years, while German 10-year Bund yields hit a 15-year high.

"Asia has walked into one of those sessions where the market feels like it is carrying a lit cigarette through a petrol station," said market commentator Stephen Innes.

"Bonds are heavy, Brent is back above $91/bbl, and the Middle East peace trade is fraying at exactly the wrong moment for a market that had grown comfortable with the idea that softer US data would automatically deliver lower yields, an easier Fed and another free pass for risk."

In equity movements, tech and electronic-components stocks were the day's worst performers, including South Korea's Samsung Electronics and LG Innotek, China's Tencent and SMIC and Japan's Kioxia, Sony and Murata Manufacturing.

Over in Bombay, Milky Mist Dairy Food surged 30% in its IPO to hit 181.5 rupees, valuing the foods company at INR139.69bn ($1.46bn). The market debut raised $163m for the Temasek-backed company.