European shares followed Asian markets lower Thursday after yields on U.S. Treasury bonds surged to multi-year highs as U.S. central bank officials expressed confidence in the staying power of the current expansion.
KEEPING SCORE: The DAX in Germany lost 0.3 percent to 12,247.20 while in France the CAC 40 sank 0.8 percent to 5,450.10. Britain's FTSE 100 also tumbled 0.8 percent, to 7,448.91. The S&P future contact dropped 0.6 percent to 2,914.20 and the contract for the Dow lost 0.5 percent to 26,732.00, auguring a dismal start for Wall Street.
ASIA'S DAY: India's Sensex tumbled 2.2 percent to 35,237.49 and Hong Kong's Hang Seng index sank 1.7 percent to 26,623.87. Japan's Nikkei 225 index lost 0.6 percent to 23,975.32, while the Kospi in South Korea sank 1.5 percent to 2,274.49. Australia alone posted gains, as the S&P ASX 200 jumped 0.5 percent to 6,176.30. India's Sensex lost 1.8 percent to 35,332.22. Shares also fell in Taiwan, Singapore and Thailand. Markets in mainland China are closed for a weeklong holiday.
INDIAN SELL-OFF: Shares sank in India on concerns over continued weakness in the rupee and over the country's trade deficit thanks to surging costs for oil imports. Reports said the commerce minister planned to convene a meeting Thursday to discuss the problem. The rupee was trading at 73.71 to a U.S. dollar after hitting a record low of 73.81. The currency has lost 15 percent this year.
BONDS SURGE: The yield on the benchmark 10-year Treasury note spiked to its highest level in more than seven years and was hovering at 3.22 percent during the Asian trading day. The surge in bond yields to multi-year highs has been driven by U.S. interest rate hikes, buttressed by bullish commentary from Federal Reserve Chairman Jerome Powell and other U.S. central bank officials.
ANALYST'S VIEWPOINT: "Asian stocks are not faring so well which is not so untypical when the U.S. dollar strengthened markedly versus Asian currencies, notably vs the (Chinese) yuan, which is a crucial bellwether of local sentiment," Stephen Innes of OANDA said in a commentary.
ENERGY: Benchmark U.S. crude fell 13 cents to $76.28 per barrel in electronic trading on the New York Mercantile Exchange. It jumped 1.6 percent to settle at $76.41 a barrel in New York. U.S. crude has hit four-year highs this week. Brent crude, used to price international oils, lost 14 cents to $86.15 per barrel. It rose 1.8 percent to $86.29 a barrel in London.
CURRENCIES: The dollar fell to 114.32 from 114.48 yen. The euro was flat at $1.1475.