* MSCI Asia-Pacific except Japan 0.79% lower
* China Shenzhen CSI 300 0.9% lower
* The dollar gains against the euro and the yen as US yields advance
* Nasdaq falls 2.4%, confirming correction
SYDNEY / NEW YORK, March 9 (Reuters) – Asian stocks fell on Tuesday as rising bond yields hit tech stocks and company valuations in China and Korea and investors grappled with their inflation fears as the United States appears poised to pass a $ 1.9 trillion stimulus. package.
MSCI’s broader Asia-Pacific stock index outside of Japan was 0.79% lower, while Korea’s Kospi fell 1.88%, its fourth straight session of losses. Japan’s Nikkei cut losses earlier in the session to rise 0.24%.
US Treasury Secretary Janet Yellen said Monday that President Joe Biden’s coronavirus aid package would provide sufficient resources to drive a “very strong” US economic recovery, noting that “there are tools” to cope. to inflation.
Despite the positive signs, investors remain in conflict over whether the stimulus will help global growth recover more quickly from the COVID-19 recession or cause the world’s largest economy to overheat and lead to runaway inflation.
“The possibility that we will see more inflation in the economy is significantly increased by the monetary policy actions and the fiscal policy actions that we are seeing around the world,” Goldman Sachs CEO David Solomon said at a conference in Sydney. via webcast.
“There is certainly a reasonable outcome where inflation accelerates faster than people expect, and that will obviously have an impact on markets and volatility.”
The tech sector and other high-value companies have been highly susceptible to rate hikes.
Australian stocks posted overnight gains on Wall Street with the leading S & P / ASX 200 index climbing as much as 1.04% on Tuesday. However, Australian tech stocks fell for the sixth straight session in line with their US peers.
The index returned those gains to be just 0.40% higher in afternoon trading following technology downturns and a 10% drop in Insurance Australia Group shares ahead of an announcement on the insolvency of the service provider. Greensill Capital Financials.
China’s blue chips were down 1% while Hong Kong’s Hang Seng advanced 0.9%.
On Wall Street, the Dow advanced while the Nasdaq lost more than 2%, marking a drop of more than 10% from its high close on February 12 and confirming a correction in the value of the index.
The Dow Jones Industrial Average rose 0.97%, the S&P 500 lost 0.54% and the Nasdaq Composite fell 2.41%.
The pan-European STOXX 600 .STOXX index was up 2.10% and MSCI’s global equity gauge was down 0.02%.
“If rates are going up because people are getting optimistic about what economic growth looks like, that continues to support equity prices,” said Tom Hainlin, global investment strategist at US Bank Wealth Management’s Ascent Private Wealth Group at Minneapolis.
US Treasury yields advanced as investors continued to price higher inflation and more optimistic outlook for the US economy as it emerges from the coronavirus pandemic.
The 10-year benchmark yield rose to 1.6029%, from 1.594% late Monday.
In currency markets, the dollar index hit a three-and-a-half month high, rising 0.523%, with the euro rising 0.06% to $ 1.185.
Oil prices rose on Tuesday but failed to regain Monday’s gains after attacks on oil facilities in Saudi Arabia pushed prices to the highest level since the COVID-19 pandemic began.
Brent crude futures were up 33 cents, or 0.51%, at $ 68.57 a barrel. US crude futures were 27 cents, or 0.42% higher, at $ 65.32.
Spot gold added 0.4% to $ 1,688.42 an ounce.
Reporting by Paulina Duran and Matt Scuffham; Editing by Sam Holmes and Christian Schmollingr