Investing.com - Asian markets are likely to kick off Thursday on a positive note, following an overnight surge in tech stocks on Wall Street. This upswing was primarily driven by a retreat in US bond yields from record highs.
By 11:20 AEDT (12:20am GMT) the S&P/ASX 200 was flat while the KOSPI 200 and Nikkei 225 added 0.2% and 0.3% respectively.
Among US indices, the Dow Jones Industrial Average added 127.2 points or 0.4% to 22,129.6, the S&P 500 lifted 34.3 points or 0.8% to 4,263.8, and the NASDAQ Composite gained 176.5 points or 1.4% to 13,236.
US bond yields have seen a significant increase since the Federal Reserve hinted in late September that rates might remain high for longer than initially expected, in an effort to control inflation. This sudden repricing in the bond market has led to trepidation among buyers, pushing yields further up and causing fluctuations in the financial markets. The 10-year Treasury yield fell by 6.6 basis points to 4.735% on Wednesday, while the 30-year Treasury yield dropped by 6 basis points to 4.876%.
Investor attention remains fixed on the political turbulence in Washington and the possibility of a government shutdown in November. The upcoming nonfarm payrolls report for September is also under scrutiny, with expectations of a slowing labor market but a persistently low unemployment rate of 3.7%.
In the commodities market, Brent crude oil experienced a 5.3% drop to US$86.10 a barrel, while gold remained steady at US$1,821.41.
In the Australian bond market, the yield on Australian 2-Year government bonds rose to 4.14%, and the 10-Year yield also increased to 4.66%.
Asia-Pacific currencies, including the Thai Baht remained little changed while the Australian dollar, Korean Won, and Japanese Yen each ticked 0.1% higher.
Among Asian markets, mainland China is set to remain closed for the week due to a holiday, while Hong Kong shares closed lower. Auto and retail stocks led the losses, while Chinese property companies continued to impact the market negatively due to default risk concerns.
In Japan, stocks ended lower due to rising concerns about higher borrowing costs, with the 10-year Japanese government bond yield hitting a new decade high. Indian shares also fell, primarily driven by declines in auto and financial stocks amid worries about increasing borrowing costs.
European stocks experienced mixed trading as ongoing anxieties about inflation and higher interest rates affected crude oil prices and energy shares. Brent crude retreated 3.8% to $87.44 a barrel, influencing stocks such as BP (LON:BP), Eni (BIT:ENI), Repsol (LON:0NQG), Shell (AS:SHEL), and TotalEnergies (EPA:TTEF).
The FTSE 100 closed down 0.8% on Wednesday due to weakness in crude oil and metal prices. Oil majors BP and Shell were among the significant drags on the index. In contrast, Tesco PLC (LON:TSCO) led the gains after upgrading its full-year guidance on profit and cash flow following robust interim results.