Asian Stocks Off Record Highs as Wall St. Flags

Asian Stocks Off Record Highs as Wall St. Flags

Investors were spooked by the first two-day decline on Wall Street so far this year, which prompted a flight to the safety of USA government bonds, said Gennadiy Goldberg, interest rates strategist at TD Securities in NY. The dollar index last stood at 89.160 after rising as high as 89.637 in the last session. The slide erased some of the gains the market had racked up since the beginning of the year, though the market was still on track to close out January with a gain.

The pan-European FTSEurofirst 300 index closed down 0.83 percent and MSCI's all-country world stock index shed 0.99 percent.

The Nasdaq Composite dropped 23.86 points, or 0.32 percent, to 7,481.92. The S&P 500 lost 7.6 points, or 0.26 percent, to 2,865.27.

The bearish sentiment in Asia followed a softer lead from Wall Street, which has led a global equities rally over the past year as strong global economic growth has fuelled higher corporate earnings and stock valuations.

The US Treasury 10-year note yield touched its highest in almost four years overnight at 2.733 per cent, while 30-year bond yield climbed to its highest since May 2017.

Benchmark 10-year U.S. Treasury notes fell 5/32 in price to yield 2.7199 percent.

"The yield rise may have bumped off US stocks from highs, but a correction was due after their recent gains", Ichikawa said.

"This is a rise in real interest rates, also reflecting a rise in inflation expectations", said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

Investors awaited President Donald Trump's first State of the Union address to Congress Tuesday night, a Federal Reserve statement on Wednesday and a jobs report on Friday that serves as a key barometer of the USA economy.

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TRUMP: Also on investors' radar: Tuesday night's State of the Union address by President Donald Trump, and a two-day meeting of the Federal Reserve's policymaking committee that wraps up Wednesday.

The dollar rose 0.2% to ¥109.110 following its descent to a four-month low of ¥108.280 on Friday.

The euro was down 0.2 percent at $1.2361 after slipping overnight from a three-year peak of $1.2538. Hong Kong's Hang Seng edged 0.1 percent lower to 32,589.83 and Sydney's S&P-ASX 200 added 0.3 percent to 6,037.70.

Oil prices extended losses after being pressured by the dollar's bounce and rising US crude output.

Brent crude futures settled down 44 cents to $69.02 a barrel, while West Texas Intermediate futures slid $1.06 to settle at $64.50.

Oil prices extended losses after being pressured by the dollar's bounce and rising U.S. crude output. It rose 63 cents, or 1 percent, to $66.14 a barrel in NY.

The April gold contract was up US$1.30 to US$1,346.40 an ounce and the March copper contract was unchanged at US$3.19 a pound.

The metal climbed to $1,366.06 last week, its highest since August 2016.

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