Middle East Geopolitical Tensions Escalate Again, Asian Markets Turn Red

Asia stock markets were lower today as investors grew concerned about higher US government bond yields and renewed geopolitical tensions in the Middle East. The Nikkei 225 in Japan fell 0.88%, with the Topix down 0.75%. South Korea’s Kospi declined 0.52% and the small-cap Kosdaq shed 2.15%. In Australia, the S&P/ASX 200 dropped 0.5%. Hang Seng Index futures in Hong Kong stood at 25,603, below the previous close of 25,797.85.

Market sentiment was shaken after US President Donald Trump revealed he had been ‘one hour’ away from ordering an attack on Iran before delaying the plan for several days.

Pressure in the markets also came from the US bond market. Investors continued to divest government debt amid growing concerns that inflation would pick up. The 30-year Treasury yield touched 5.197%, the highest level since July 2007, before easing slightly to around 5.174%.

The rise in yields narrowed the upside for equity gains as borrowing costs are expected to stay high longer.

US stock index futures edged higher. S&P 500 futures rose 0.14%, Nasdaq-100 futures gained 0.25%, and Dow Jones futures were up 55 points, or 0.11%.

Wall Street closed with lower finishes last night as the S&P 500 recorded a third straight session of declines, weighed by the jump in bond yields.

The S&P 500 finished down 0.67% at 7,353.61, while Nasdaq Composite closed down 0.84% at 25,870.71. The Dow Jones Industrial Average dropped 322.24 points, or 0.65%, to 49,363.88.