Asia report: Tokyo, Seoul stocks lead markets lower

(Sharecast News) - Asian stock markets were a sea of red on Wednesday, with heavy losses recorded in Tokyo and Seoul, as tech stocks bore the brunt of reduced risk appetite.

Surging bond yields and higher oil prices have weighed on sentiment across global stock markets this week, with 10-year yields in Germany and Japan in particular hitting their highest since 2011 and 1996, respectively.

"Bond yields keep going up and the pressure on risk assets ratchets up further. Fresh multi-year/multi-decade highs for government bond yields this morning reflect inflation expectations and fiscal policy risks with a fresh flare-up in the Middle East layered on top," said Neil Wilson, UK investor strategist at Saxo Markets.

The Nikkei. 225 finished 2.9% lower, while the KOSPI dropped 4.0%. Losses elsewhere were more moderate, with the Hang Seng down 0.1%, the Shanghai Composite down 1.0% and the Sensex down 0.5%.

Oil prices were also on the rise - though had pared gains slightly by the time Asian stock markets closed. Brent crude was up just 0.3% at $94.91 a barrel, having trimmed an earlier rise which had sent it to nearly $97, but still trading around 20% higher than a month ago, as fighting between the US and Iran intensified.

Japanese tech stocks were under the cosh, including SoftBank, Advantest and Tokyo Electron, along with mining groups Sumitomo, Mitsui Kinzoku and Dowa Holdings as metal prices fell across the board.

One bright spark was STX Green Ocean as the South Korean shipping company benefited from expectations of higher freight rates as geopolitical conflict continues to disrupt routes across the Middle East. The stock finished 30% higher on the day.