The popular stock index of Japan Nikkei 225 dropped more than 2% as Asia pacific stocks plunged on Wednesday. Nasdaq also gets affected due to the overnight mishap. An increase in bond yields creates a lot of problems for Asia pacific stocks. Nasdaq fell by nearly 3% on Wednesday. Japan’s Topix Index slid 2.5%, and Nikkei 225 dropped 2.4%, while the Kospi of South Korea fell 1.8%.
The Hang Seng index of Hong Kong slipped by 1.8%. Shanghai and Shenzhen of mainland China declined by 0.98% and 0.95%. ASX of Australia fell 1.4%. Prices are moving against the yields. 10-year treasury yield crossed the mark of 1.5% and is kept increasing and closed at 1.55%.
The increasing yields impacted technology stock hard in overnight trade on Wall Street and hit the Nasdaq composite that fell by 2.83%. This is because future cash flows of tech stocks are becoming less valuable because of the rising yields. But this environment results in the overvaluation of blue-chip stocks. As a result, the Dow Jones industrial average declined 569.4 points to 34300.
Shares of Japan’s Softbank group fell 2.33% as Asian tech stocks tumbled. Samsung Electronics of South Korea declining 2.6%. The effect can be noticed on Tencent and Alibaba also as Chinese tech stock Tencent dropping 3.3% and Alibaba plunging 2.9%.
The companies involved in the Hang Seng index are witnessing a significant fall as the index fell 3.18%. S&P 500 on Wall Street fell 2.04% overnight to 4,352.6. Analysts said the market is expected to rise in the middle of the fourth quarter as an overall rise can be seen in Asia pacific stocks due to vaccination, and the market would be back to normalcy.