Asian stocks fall from record highs on rising bond yields, weak US data by Reuters

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© Reuters. FILE PHOTO: HKEX sign seen at China International Trade in Services Fair 2020 in Beijing

By Swati Pandey SYDNEY (Reuters) – Asian stocks fell back from record highs on Friday on longer-term bond yields and disappointing data from the US tables. MSCI’s broader index of Asia Pacific stocks outside Japan was down 0.1% for the last time to 733.67 from a record high of 745.89 touched on Thursday. The index is on track for a small weekly loss after two consecutive weeks of gains. Since the beginning of the year, the index has risen almost 10.5%, driven mainly by relaxed monetary and fiscal policies around the world. On Friday, Australia’s benchmark index was down 0.8% while it fell 0.4%. Chinese stocks started in the red with the top-line CSI300 up 0.6%. “The recent rise in longer-term basic yields appears to be weighing on the minds of equity investors,” said Rodrigo Catril, currency strategist at National Australia Bank (OTC :). Core bond yields have risen globally led by so-called “reflation trading,” where investors are betting on a recovery in growth and inflation. The successful launches of the coronavirus vaccine so far and hopes for massive fiscal spending under United States President Joe Biden have spurred reflation operations. Germany’s 10-year yield on Thursday hit its highest close since June, UK 10-year yields were trading at a 10-month high of 0.65% and US Treasury yields hovering. Year-long highs around 1.3%, a major factor supporting the US dollar. Rising bond yields hurt gold’s appeal, and spot prices hit a seven-month low of $ 1,766 an ounce on Friday. While rising yields weighed on investor sentiment, “disappointing unemployment figures in the United States didn’t help the cause either,” Catril added. An unexpected increase in the number of Americans seeking unemployment benefits weighed heavily on the outlook. The Labor Department reported that initial jobless claims rose by 13,000 to 861,000, injecting skepticism about how quickly the US economy could recover from the global pandemic. In addition, home construction in the United States fell 6.0% in January, the first drop in five months. On Wall Street, the Dow fell 0.38%, 0.44% and 0.72%. In currencies, the dollar remained stable with its index at 90,568. The British pound reached its highest level in more than three years at $ 1.3965 led by the successful launch of the vaccine in the country, where 16.5 million people have already been inoculated. It is on track for a sixth consecutive weekly rise. () The euro is poised for a small weekly loss. The single currency last stood at $ 1.2085. The risk-sensitive Australian dollar was on track for a third consecutive weekly rise, last trading at $ 0.7762. In commodities, oil markets saw some profit-taking after days of gains driven by a deep freeze in Texas that hit production. [O/R] it fell 1.17 dollars to settle at 62.76 dollars a barrel. US West Texas Intermediate (WTI) crude futures fell $ 1.37 to $ 59.15 a barrel. It rose nearly 3% to its highest level since April 2012 on Thursday driven by demand from Chinese investors returning from a week-long vacation.