Technology stocks in Asia-Pacific slip; 10-year U.S. Treasury yield surges

SINGAPORE — Technology stocks in Asia-Pacific declined in Wednesday morning trade, mirroring losses seen among their peers on Wall Street following an overnight surge in the U.S. 10-year Treasury yield.

Chinese tech stocks in Hong Kong dropped in Wednesday morning trade, with Alibaba falling 3.87% and Meituan declining 3.89%. The Hang Seng Tech index traded 2.48% lower.

In Japan, shares of SoftBank Group shed 2.48%. Over in South Korea, Kakao shares declined 2.33% and Naver slipped 2.34% while SK Hynix fell more than 2%.

Those losses in Asia came after the tech-heavy Nasdaq Composite lagged overnight on Wall Street, dropping 2.26% to 14,204.17.

The broader Asia-Pacific markets also traded in negative territory on Wednesday.

Hong Kong’s Hang Seng index dropped 1.71%. Mainland Chinese stocks declined as they returned to trade following holidays earlier in the week. The Shanghai composite was down 0.38% while the Shenzhen component shed 0.36%.

Chinese services sector activity saw a sharp contraction in March, a private survey showed Wednesday. The Caixin services Purchasing Managers’ Index declined to 42.0 in March, well below February’s reading of 50.2 as well as the 50 mark that separates growth from contraction on a monthly basis. Wednesday’s reading was also the lowest since February 2020.

That data release comes as China continues to battle its worst Covid outbreak since the beginning of the pandemic in early 2020.

In Japan, the Nikkei 225 slipped 1.5% while the Topix index fell 1.1%. South Korea’s Kospi dipped 0.54%.

Elsewhere, the S&P/ASX 200 in Australia declined 0.77%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.18% lower.

Investors will continue to monitor moves in U.S. Treasurys on Wednesday. The 10-year Treasury rose to its highest level since May 2019 on Tuesday, hitting a high of 2.562% before settling at 2.55%.

The yield on the benchmark 10-year Treasury note last sat at 2.6011%, well above the 2-year Treasury note’s yield of 2.5751%. Yields move inversely to prices.

A topping of the 2-year Treasury yield against the 10-year rate, which happened last week before the recent reversal, has historically been observed ahead of recessions.

The 10-year Treasury yield jumped overnight after comments from U.S. Federal Reserve Governor Lael Brainard suggested an aggressive approach to shrinking the central bank’s balance sheet.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.602 following a recent jump from below 99.

The Japanese yen traded at 123.94 per dollar, weaker as compared with levels below 123.3 seen against the greenback yesterday. The Australian dollar changed hands at $0.7575 after a recent drop from above $0.762.

Oil prices were lower in the morning of Asia trading hours, with international benchmark Brent crude futures declining 0.42% to $106.19 per barrel. U.S. crude futures shed 0.46% to $101.49 per barrel.